Siam Commercial Bank's research house has downgraded its 2022 economic growth forecast from 3.4% to 3.2%, as the Covid-19 Omicron variant is expected to take a toll on the global economy and delay Thailand's tourism recovery until at least the beginning of next year.
However, the effects on the economy are expected to be milder than those of the Delta variant.
Overall, the economy in 2022 would see a slow, steady rebound from lasting scarring effects, Yunyong Thaicharoen, chief economist at Siam Commercial Bank Economic Intelligence Center (SCB EIC), said yesterday.
Thailand's economy is poised to rebound next year, but the pace would be slow and still lag its full potential.
SCB EIC expects the economy will return to its pre-pandemic 2019 level by mid-2023, he said.
In 2022, the research house expects a rebound in domestic and external demand, led by buoyant exports, in line with an improving global economy and trade.
The tourism sector will likely regain pace as higher vaccination rates in Thailand and other countries help facilitate international travel, said Mr Yunyong.
The research house anticipates around 5.9 million foreign visitors next year and 330,000 this year.
The Omicron variant remains a critical risk that warrants monitoring. Some early signs suggest the new variant could be more transmissible and resistant to current vaccines, he said.
Mr Yunyong said SCB EIC assessed the Thai economy will grow faster than expected at 1.1% in 2021, up from its previous estimate of 0.7%, because domestic infections are decreasing, more people are getting vaccinated and government restrictions are easing, allowing a resumption of various economic activities.
Tourist arrivals are likely to pick up after Thailand's reopening, helping to bolster a recovery.
Exports should remain robust thanks to a low-base effect from last year and global economic and trade expansion, although the recent Covid resurgence in Europe and a supply bottleneck might weigh down Thai shipments during the end of 2021, said SCB EIC.
On Wednesday, the Joint Standing Committee on Commerce, Industry and Banking issued a forecast for 2022 GDP growth of 3-4.5%, compared with its estimate of 0.5-1.5% growth this year.