KBank cuts growth forecast to 0.5% from 2.7%

A cleaner is at work at the MBK shopping centre in Pathumwan district of Bangkok. The obvious disappearance of tourists causes Kasikorn Research Center to predict a meagre economic growth this year. (Photo by Wichan Charoenkiatpakul)

Kasikorn Research Center (K-Research) has slashed its forecast for the country’s economic growth this year to 0.5% from 2.7%, assuming that the coronavirus spread will wipe 410 billion baht off tourism receipts.

The downward revision is based on assumptions that the number of infection cases in China will peak in the next 1-2 months; that the spread outside China, particularly in Italy and South Korea, can be contained in the second quarter; and that the number of infected patients in Thailand won’t spike in the near term.

Although Thailand has so far managed to contain the virus spread, the country’s tourism sector will bear the brunt of the epidemic, said K-Research assistant managing director Nattaporn Triratanasirikul.

The research unit under Kasikornbank said foreign tourists this year will decline by 8.3 million from the previous year, shaving 410 billion baht off tourism income.

Ms Nattaporn said the estimated forgone income accounts for 2.4% of GDP.

“The Thai economy will contract by less than 1% in the first quarter and deeper in the second quarter, slipping into a technical definition of recession, but it doesn’t stem from the economic structure,” she said.