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Thailand’s central bank said it is likely to cut its GDP forecast after a new virus outbreak

© Reuters. FILE PHOTO: Thai baht money is seen at Kasikornbank in Bangkok

By Orathai Sriring and Satawasin Staporncharnchai

BANGKOK (Reuters) – Thailand’s central bank is likely to slash its economic growth outlook this year and the year after the country struggles with a third wave of COVID-19 infections that are spreading rapidly.

The new outbreak, partly due to the highly contagious B.1.1.7 variant, caused more than 26,000 cases and 46 deaths in just 25 days, dealing a blow to the reopening attempt. Back of the country depends on tourism for foreign tourists.

The growth forecast released in March has assumed that Thailand will be able to gradually reopen to vaccinated foreign tourists without requiring quarantine measures in the fourth quarter, the bank’s director. Senior central Sakkapop Panyanukul told Youtube channel Longtunman late on Saturday.

“Given the current outbreak and vaccine efficacy, I have to say that assumption is tough,” he said, adding that the GDP growth forecast for 3% this year and 4.7% next year will probably “have to reduce quite a lot”.

The economy could take six quarters to return to pre-pandemic levels and will be supported by improved exports, he said.

But the central bank’s forecast for 3 million foreign tourists this year and 20 million next year will be difficult to meet, Sakkapop added that it may take 4-5 years before Thailand can shoot. back to pre-pandemic levels of 40 million foreigners. tourists a year.

This industry accounts for 11% of GDP and employs more than 10 million people.

Mr. Sakkapop said the BOT will keep the right financial conditions to support the economy, adding that at present “it is not necessary to use unique measures”.

The BOT has kept its policy rate at a record low 0.50% since mid-2020 and will revisit its next policy on May 5. Most analysts have found no change. Policy changes in the near future.

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