Thai economy shrinks, hopes for tourism-led recovery
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Thailand's economy shrank in the third quarter, official data showed Monday, but hopes for a gradual recovery are picking up following this month's return of foreign tourists after the kingdom's reopening.
The country last year suffered its worst performance since the Asian financial crisis of 1997 with a 6.1 percent economic contraction.
The Office of the National Economic and Social Development Council (NESDC) said gross domestic product shrank 0.3 percent year-on-year in the third quarter, blaming it on Covid restrictions.
"The measures to control the outbreak affected the economic activities," said Danucha Pichayana, secretary general of the NESDB, on Monday during a news conference.
An outbreak in April this year saw the emergence of the highly contagious Delta variant, which led to reimposing tough restrictions on services and restaurants.
According to NESDC data, the food service and accommodation sector shrank 18.6 percent July-September because of "a decrease in domestic tourism and household spending".
In Bangkok -- a key hotspot during the Delta wave -- restrictions only started to ease in recent weeks, with the government allowing certain restaurants to reopen and serve alcohol.
The relaxation of Covid restrictions -- along with a gradual return of vaccinated foreign tourists since November 1 -- has officials hopeful for growth of 1.2 percent this year.
The country also expects five million tourists to return next year, bringing revenues of up to 440 billion baht ($13.4 billion), said the NESDC.
Danucha said the forecast for 2022 is between 3.5 and 4.5 percent as Thailand slowly recovers from the pandemic.
But with China -- the source of most of Thailand's foreign travellers before the pandemic -- still restricting returns, the kingdom's cash cow industry is unlikely to fully recover before 2024, experts say.
Thailand has so far registered more than two million cases of coronavirus and more than 20,000 deaths. The bulk of the infections came after the emergence of the Delta variant.