Thailand's economy shrank at a slower pace in the third quarter driven by the easing of Covid-19 control measures though travel restrictions continued to dampen the tourism sector, official data showed on Monday.
Gross domestic product fell by less-than-expected 6.4 percent on a yearly basis in the third quarter, slower than the 12.1 percent decline posted in the second quarter, the National Economic and Social Development Council, or NESDC, reported.
GDP was expected to shrink 8.6 percent. Nonetheless, with the third consecutive contraction, the economy remained under recession.
On a quarterly basis, GDP logged its biggest growth in more than eight years. GDP expanded 6.5 percent, in contrast to a 9.9 percent fall in the preceding period.
Economists had forecast a moderate growth of 3.8 percent. The latest pace of expansion was the fastest since the first quarter of 2012, when GDP was up 9.4 percent.
The government raised its GDP forecast for 2020 to -6 percent from -7.3 to -7.8 percent estimated previously.
Next year, the economy is projected to grow within the range of 3.5 - 4.5 percent underpinned by improving domestic demand, the recovery in domestic and global trade and economic stimulus, the agency said.
It is expected that export values of goods, private consumption expenditure, and total investment will increase by 4.2 percent, 2.4 percent, and 6.6 percent, respectively.
GDP figures showed that the worst is now over for Thailand's economy, but its dependence on tourism means it is likely to experience one of the slowest recoveries in the region, Gareth Leather, an economist at Capital Economics, said.
The economist noted that the nation appears to have eliminated the virus. Social distancing is unlikely to be a drag on growth going forward. Loose fiscal and monetary policy will also help support the recovery, Leather added.
On the expenditure-side, data showed that private consumption expenditure dropped only 0.6 percent due to the easing of lockdown measure and domestic travel restriction, coupling with the implementation of government policies.
Meanwhile, government consumption expenditure grew 3.4 percent in the third quarter. At the same time, investment decreased 2.4 percent due to a 10.7 percent fall in private investment.
Exports of goods and services plunged 23.5 percent and imports declined 20.3 percent.
The government projected headline inflation in the range of 0.7 - 1.7 percent and the current account tends to register a surplus of 2.6 percent of GDP in 2021.
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