Thailand's 2020 growth could be nearly flat due to Covid-19: Citi

Mask-wearing tourists at the Grand Palace in Bangkok.
Mask-wearing tourists at the Grand Palace in Bangkok.
MARCH 02, 2020 - 6:15 PM

THAILAND'S growth could be virtually flat in 2020 due to the Covid-19 outbreak's impact on tourism, said Citi economist Nalin Chutchotitham in a March 1 note. She revised her full-year estimate to 0.2 per cent, down from 2.2 per cent previously.

This is based on new estimates of tourist arrivals falling 15.4 per cent year on year, and revenues falling more than 18 per cent.

The assumption is that China's ban on outbound group tours will remain through at least the second quarter of 2020, erasing 60 to 70 per cent of Thailand's arrivals from China.

If the virus peaks in March and new infections decline quickly by the second quarter, Thailand's tourism could normalise and rebound within a year, by about 12 per cent in 2021. But she added: "There remains a significant level of uncertainty and we would continue to review our assumptions."

With forecasts also lowered for most growth drivers apart from government spending, the first half is expected to see a year-on-year contraction, with a technical recession being "probable" if greater fiscal spending does not lift Q2 activity sufficiently.

Your feedback is important to us

Tell us what you think. Email us at

As for the labour impact, if the tourism and manufacturing sectors shed just 3 per cent of workers, the unemployment rate could double to 2 per cent.

To help firms cope, the Ministry of Finance has said it will propose a short-term stimulus package to the cabinet by end-March. Citi also expects another 25 basis points rate cut, whether in march or the second quarter.