Thailand’s economy saw its biggest annual contraction in 22 years and a record quarterly fall in the April-to-June period, as the COVID-19 pandemic and restriction measures hit tourism, exports and domestic activity, prompting an outlook downgrade.
Southeast Asia’s second-largest economy, which is heavily reliant on tourism and exports, shrank 12.2 percent in the second quarter from a year earlier, the worst contraction since the Asian financial crisis in 1998, data from the state planning agency showed.
That was better than a 13.3 percent slump seen in a Reuters poll, and compared with a downwardly revised 2 percent fall in the March quarter.
Photo: AP
On a quarterly basis, the economy shrank a seasonally adjusted 9.7 percent, the deepest on record, but better than the 11.4 percent drop forecast by economists.
The National Economic and Social Development Council cut its GDP forecast for this year. It now expects Thailand’s economy to shrink by 7.3 to 7.8 percent, having previously forecast a 5 to 6 percent contraction.
“Today’s economic release underscores the collapse of aggregate demand, both externally and internally,” Kasikornbank PCL capital markets research head Kobsidthi Silpachai said.
“Recovery will be lengthy as the shock to the demand and supply side has been the most severe in living memory,” he said.
While Thailand has lifted most lockdown restrictions after seeing no local transmission of COVID-19 for more than two months, its economy continues to suffer from an ongoing ban on incoming passenger flights and from tepid global demand.
The number of foreign visitors fell to zero in the April-to-June period, and Thailand has also shelved travel bubble plans amid new virus waves.
The planning agency expects only 6.7 million foreign tourists to come to Thailand this year, down 83 percent from last year’s record 39.8 million.
The downturn comes despite government efforts to support the economy with a 1.9 trillion baht (US$61 billion) fiscal stimulus package, while the central bank has also slashed interest rates by 75 basis points so far this year to a record low of 0.50 percent.
The impact of the lockdown and the travel ban is to continue to affect domestic consumption and investment, with anti-government protests adding to the risks, while exports would remain weak due to soft global demand, analysts say.
The state planning agency also cut its forecast for exports this year, expecting them to fall 10 percent versus a previous forecast for an 8 percent decline.
On Ireland’s blustery western seaboard, researchers are gleefully flying giant kites — not for fun, but in the hope of generating renewable electricity and sparking a “revolution” in wind energy. “We use a kite to capture the wind and a generator at the bottom of it that captures the power,” said Padraic Doherty of Kitepower, the Dutch firm behind the venture. At its test site in operation since September 2023 near the small town of Bangor Erris, the team transports the vast 60-square-meter kite from a hangar across the lunar-like bogland to a generator. The kite is then attached by a
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
RSS