Asia Pacific

Thai business group cuts 2021 GDP outlook for 4th time amid virus outbreak

2 minute read

People wearing face masks shop for street food in Chinatown amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, January 6, 2021. REUTERS/Athit Perawongmetha/File Photo

BANGKOK, July 7 (Reuters) - Thailand's leading business group on Wednesday lowered its 2021 economic growth forecast for the fourth time this year to 0.0% to 1.5%, from 0.5% to 2.0%, due to a prolonged third wave of COVID-19 infections and despite higher exports.

The tourism-reliant country's biggest outbreak that emerged in April has seen the most cases and deaths, dealing a deeper blow to an already fragile economic recovery.

"The rapid and severe third wave has affected domestic demand although a clear global economic recovery will benefit Thai exports," Payong Srivanich, chairman of the joint-business group of industry, banking and commerce, told a briefing.

The group raised its export growth forecast to 8% to 10% this year from 5% to 7% due to better-than-expected global demand but cited infections at factories as a risk.

In the first five months of 2021, exports rose 10.78% from a year earlier, customs data showed.

If the outbreak cannot be controlled, more restrictions are imposed and foreign tourist numbers miss targets, the economy is likely to contract this year, Supant Mongkolsuthree, chairman of the Federation of Thai Industries, told the briefing.

Southeast Asia's second-largest economy shrank 6.1% last year, the deepest slump in over two decades, as the tourism sector was devastated by the pandemic.

Reporting by Satawasin Staporncharnchai and Kitiphong Thaichareomn Writing by Orathai Sriring Editing by Ed Davies

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