Thailand records biggest economic contraction in more than 20 years

Thailand’s economy shrank by 12.2% in the second quarter of 2020, marking the worst contraction recorded in the country since the Asian financial crisis in 1998.

According to Thailand’s Office of National Economic and Social Development Council (NESDC), the slowdown can be attributed to lockdowns introduced by the government at the height of the outbreak of the pandemic in Thailand.

Since July 1, the vast majority of businesses in Thailand have been allowed to resume operations. However, the country remains under a state of emergency until the end of August 2020 as Thai businesses attempt to kickstart their recovery from COVID-19.

Like many of its counterparts in South-East Asia, Thailand is expected to enter into recession this year, with the NESDC forecasting a 7.5% contraction of the economy for the year.

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In South-East Asia, both Malaysia and Indonesia reported record economic contraction in the second quarter of 2020, the Philippines entered into recession for the first time in almost three decades, and Singapore entered into a technical recession in July.

To date, the Thai government has introduced stimulus packages totaling 2.25 trillion baht (US$72 billion) for fiscal years 2020 and 2021, including about 22.4 billion baht (US$718 million) to revitalise the tourism industry.

Before the pandemic struck, around 40 million tourists were expected to visit Thailand this year, exacerbating a rising unemployment rate that sees 8.4 million jobs at risk in the country.