Thai GDP recovers in 2021

28 Feb 22

Thailand’s economy grew by 1.6% in 2021 after Covid-19 lockdown measures impacted on international trade and tourism.

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Bangkok

Bangkok, Thailand. Image ©Shutterstock

The growth rate in 2021 was one of the slowest in Southeast Asia, and followed a 6.1% contraction in 2020, according to outturn data from the National Economic and Social Development Council.

The outlook was bolstered by better than expected GDP rise in the final quarter of 1.8%, fuelled by a recovery in consumer spending following an easing of Covid-19 restrictions.

The economy is expected to perform well in the first quarter of 2022, but inflationary risks are likely to continue, NESDC chief Danucha Pichayanan told a news conference.

According to Al Jazeera, he said: “The main driver will be exports and fiscal disbursement, with tourism and domestic consumption adding to the support.”

National debt hit 59.6% of GDP at the end of last year, a rise of more than five percentage points on the 54.3% recorded at the end of the first quarter of 2021.

Thailand’s debt limit increased by 10 percentage points to 70% of GDP in September, to help fund additional Covid-19 support.  

The government maintained its economic growth outlook of between 3.5%-4.5% in 2022, predicated on stronger domestic demand, a recovery in tourism and continued support from public investment.

If GDP growth hits its forecast, the national debt will peak at 62% of GDP by the end of the 2023 financial year, the government said.

In August, the central bank chief called on the government to invest a further 1trn baht ($30bn) into fighting Covid-19, as he warned restrictions continue to affect the economy.

A month prior, the World Bank Group lowered Thailand’s growth forecast to 2.2% this year – down from its 3.4% prediction in March – because of lower tourism and household spending.

The organisation stressed the need for additional investment in the country’s social security system, to ensure that more people do not fall into poverty.

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