Thailand's economy contracted at its sharpest pace in eight years in the first quarter, pushing Southeast Asia's second largest economy into recession sooner than expected, as the coronavirius pandemic hit tourism and domestic activity.
The state planning agency, reporting January-March data on Monday, slashed its forecast for 2020 gross domestic product (GDP) to a contraction of 5.0-6.0% from growth of 1.5%-2.5% projected in February.
That would be the worst decline since 1998 when the Asian financial crisis damaged the economy.
The economy shrank 1.8% in the first quarter from a year earlier, the deepest contraction since the fourth quarter of 2011, when there was bad flooding.
That was better than a 4.0% contraction seen in a Reuters poll, and compared with downwardly revised 1.5% growth in the final quarter of 2019.
"The outbreak impact in Q2 will be much bigger than in Q1," said Phacharaphot Nugtramas, economist at Krung Thai Bank, who predicts the economy will shrink 8.8% this year. The impact of lockdowns, while having eased somewhat, will continue to affect household spending and private investment for the rest of the year, he added.
On a quarterly basis, the economy shrank a seasonally adjusted 2.2%, also the worst decline since 2011, but less than the poll's 4.5% decline.
The agency revised October-December's quarterly GDP to a 0.2 contraction from 0.2% growth, meaning the economy slipped into a technical recession. The economy will be hit the hardest in the second quarter by lockdowns, Thosaporn Sirisumphand, head of National Economic and Social Development Council (NESDC), told a news briefing.
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