23 November 2020

Thai GDP contracts less than anticipated in Q3/20 following faster-than-expected recovery in private and government spendings.

The Thai economy in Q3/2020 stalled to a -6.4%YOY contraction (compared to a -12.1%YOY drop in Q2/2020).

Author: Kampon Adireksombat, Ph.D. , Panundorn Aruneeniramarn and Phimchanok Hou


The Thai economy in Q3/2020 stalled to a -6.4%YOY contraction (compared to a -12.1%YOY drop in Q2/2020). Such an improving circumstance signaled that Thailand’s economy has bottomed out, in line with the relaxation of lockdown measures and the support from government stimulus packages that boosted private consumption.

Thailand’s economic recovery is likely to continue into the last quarter of 2020, though at a slowing rate. Factors that will support growth include the low base effect in 2019 from the delayed Budget Bill in addition to improvements in the export sector. However, sluggish growth in private investment and the tourism sectors should remain.

The -6.4%YOY contraction observed in Q3/2020 was smaller than what EIC anticipated, suggesting that the Thai economy could recover slightly faster than previously expected. Exports and private consumption should be the main drivers for recovery. With such regards, the actual 2020 economic growth figure could be better than previously anticipated at -7.8%.

Looking forward to 2021, the Thai economy should continue to gradually recover from the damages of scarring effects. However, promising vaccine discoveries could accelerate the recovery of Thailand’s trading partners’ economies as well as improve international tourism. As such, Thailand’s economic growth could also be higher than the forecasted 3.5%.


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