CIMB cuts Thai GDP forecast to 2.2%
A new round of restrictions aimed at containing the fresh wave of Covid-19 will shake the Thai economy’s fragile recovery from its 2020 slump, says CIMB bank. The bank has revised down its GDP growth forecast for 2021 from 2.6 per cent to 2.2 per cent.
The Bank of Thailand has already signalled it will slash its GDP forecast for this year from 3 per cent, following partial lockdowns to combat the third wave of infections that began early this month.
However, CIMB forecasts this round of restrictions will impact the economy far less than lockdowns last year, which saw the Thai economy shrink by 6.1 per cent.
The main difference, says CIMB, is the strong recovery of exports.
Exports in March jumped over 8 per cent from last year, thanks to accelerating recovery in the US and China. Exports this year could grow about 10 per cent, driven by higher demand for auto parts, electronics, chemicals, rubber products and processed food, it said.
CIMB adds that speedy vaccination is the main hope for economic recovery.
However, Thailand’s economy would likely remain sluggish this year amid a lack of foreign tourists.
The baht could weaken by over 31.50 per US dollar by the second quarter following capital outflows over fears of QE tapering amid higher inflation expectation in the US, said the bank.
It projects the year-end dollar/THB at 31.30.
