KResearch has revised the growth forecast for the Thai economy in 2021 down to 1.0%, from its previous forecast of 1.8%, because a more severe COVID-19 outbreak than previously estimated would lead to the need for stricter COVID-19 containment measures, with more of a negative impact on business sectors and employment, further worsening purchasing power and consumer confidence. While the government's relief measures should help sustain livelihoods, they cannot compensate for the overall economic impact.
KResearch have cut the 2021 forecast for the number of international tourist arrivals to 250,000-650,000, down from the prior projection of 250,000-1.2 million, although the “Phuket Sandbox" and “Samui Plus Model" programs are already open to foreign tourists. However, the openness to foreign visitors of other regions and the number of inbound tourists will remain largely dependent on the COVID-19 situation and the progress of accelerated vaccination, while other countries continue to face highly uncertain risks caused by the COVID-19 pandemic.
KResearch projects that Thai exports will grow at an accelerated rate of 11.5% in 2021, which takes into account factors such as container shortages, rising ocean freight rates and a domestic COVID-19 epidemic that may cause a shortage of workers in industrial sectors. Exports of electronics, electrical appliances, rubber products, fruits and vegetables will continue to grow strongly due to the recovering demand, while exports of petroleum-related products will still grow well since prices tend to be at high levels.
The Thai economy for the remainder of 2021 will depend on the continuation of the high-risk nature of the COVID-19 pandemic at home, vaccine efficacy and accelerated vaccination that may fall short of targets. If the domestic pandemic persists, it is expected that the government may need to take additional relief measures, but if the situation begins to abate, the government may introduce economic stimulus measures to boost the economic recovery by using the THB500 billion budget under the executive borrowing decree.
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