Thailand revises lower the 2021 GDP – UOB

Barnabas Gan, Economist at UOB Group, reviews the recent announcements around the GDP in Thailand.

Key Takeaways

“Officials from the Ministry of Finance (MOF), Bank of Thailand (BOT) and the National Economic and Social Development Council (NESDC) had recently downgraded their outlook for Thailand’s GDP for 2021. Specifically, the MOF and BOT now expect GDP to expand by 1.3% (from 2.3%) and 0.7% (from 1.8%) respectively, while the NESDC shaded their range forecast to between 0.7% and 1.2%, from a previous outlook of between 1.5% and 2.5%. Given the lacklustre economic prognosis year-to-date, we have also downgraded our GDP outlook for Thailand to 0.7% in 2021, from a previous forecast of 1.5%.”

“Data-wise, GDP expanded 7.5% y/y (+0.4% q/q sa) in the second quarter of 2021, surprising market estimates for a milder growth of 6.6% y/y (-1.1% q/qsa). The uptick in GDP also comes at the heels of a 2.6% y/y contraction in 1Q21, suggesting that while Thailand’s economy remains soft due to COVID-19-related risks, the low base effects in 2Q20 (-12.1% y/y, -9.2% q/q sa) did help shore up some recovery. Accounting for the latest data, Thailand’s economy grew 2.0% in the first half of 2021. Despite the uptick in GDP in 2Q21, the expansion rate of 7.5% y/y has been starkly poor when compared to the contraction in 2Q20 at -12.1% y/y, suggesting that Thailand’s economy is still far from preCOVID-19 levels.”