BANGKOK (Reuters) - Thailand’s finance ministry on Thursday slashed its 2020 economic forecast to a record 8.5% contraction in gross domestic product from the 2.8% growth it projected in January, due to the impacts of the coronavirus pandemic.
The ministry also cut its 2020 estimate for exports, a key driver of growth, to a fall of 11.0% from an earlier 1.0% rise, Lavaron Sangsnit, head of its fiscal policy office, told a news conference.
The ministry expected the economy to have hit bottom in the second quarter with double-digit shrinkage before gradually recovering, he said.
“A recovery is likely to be a check-mark shaped,” he said.
The government has introduced billions of dollars of stimulus packages to mitigate the fallout of the outbreak on vital tourism and domestic activity.
The ministry plans additional measures to boost consumption to be proposed to a new finance minister, Lavaron said
“The government still has room to help the economy,” he added.
Banking executive Predee Daochai is expected to be the next finance minister in a new cabinet expected to be completed by mid-August.
For 2021, Southeast Asia’s second-largest economy is expected to expand 4%-5%, with exports rising 5%, Lavaron said.
Next year’s major growth driver will be foreign tourist numbers, which are expected at 15-16 million after only 6.8 million projected for this year, he said.
In 2019, Thailand had a record 39.8 million foreign tourists whose spending accounted for 11.4% of GDP.
Writing by Orathai Sriring; Editing by Ed Davies and Martin Petty