Thailand economy

Covid-linked tourism collapse fuels shrinking Thai economy

Thailand’s economy contracted at an annual rate of 12.2% in the April-June quarter, its biggest decline since the Asian financial crisis of the late 1990s.

The data reflects a deterioration in business activity, with the country virtually closed to international travel due to the coronavirus pandemic.

The economy shrank 2% in the first quarter of the year, according to the report released Monday by the National Council for Economic and Social Development.

He showed that investment, consumer spending and trade all contracted.

Agricultural production, also affected by a drought, fell 3% while manufacturing fell 14.4%.

Thai leaders, meanwhile, are grappling with a wave of student unrest.

Events in Thailand
A pro-democracy student raises a three fingers, a symbol of the resistance’s salvation, during a rally in Bangkok, Thailand (Sakchai Lalit / AP)

Protesters call on the government to hold new elections, change the constitution and end the intimidation of government critics.

While these grievances do not mention the economy, the protests highlight public discontent with the way the military-dominated government has handled the pandemic crisis, leaving many people without means of food.

The government imposed strict controls on activity at the height of the coronavirus epidemic in the spring, including night curfews and bans on the sale of alcohol.

This appears to have kept infections under control: Confirmed cases totaled 3,377 as of Monday, according to a tally kept by Johns Hopkins University.

There were 58 deaths.

But containment has come at a cost: the loss of millions of jobs and livelihoods for the many Thais who depend on foreign tourism.

Vendors sell vegetables at a wet market in Bangkok, Thailand (Gemunu Amarasinghe / AP)
A dove representing peace is held by a pro-democracy student (Sakchai Lalit / AP)

On a seasonally adjusted quarterly basis, the Thai economy contracted 9.7% compared to the January-March quarter, where it contracted 2.5%.

It also registered a contraction in the last quarter of 2019, minus 0.3%, and has therefore been in recession this year.

The economy is doing as badly as that of Thailand’s neighbors.

Malaysia last week reported a 13.2% contraction in its economy in the last quarter.

Singapore’s economy shrank by 13.2% and that of the Philippines by 16.5%.

For the most part, this is the worst recession since the Asian financial crisis with the collapse of the Thai baht in July 1997.


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