Like many countries, Thailand’s economy was hit hard by the COVID-19 pandemic last year. The country’s GDP fell by over 6 percent in 2020 and many workers, especially those related to the tourism sector, lost their jobs.
This was despite decisive action on the government’s part to implement a package of fiscal, monetary, and financial policies to mitigate the impact of the virus on the country.
According to the IMF’s latest annual assessment or Article IV consultation, Thailand’s economy is forecast to grow at 2.6 percent in 2021, and a surge in COVID‑19 infections in the country and the region since the beginning of the year highlights the uncertainty about the path of the pandemic and the importance of continued efforts to contain the spread of the virus for a strong and durable recovery.
Here are five things to know about Thailand’s recent economic challenges and prospects for the recovery:
1. The pandemic precipitated a sudden stop in tourism flows and a significant contraction in economic activity
Thailand’s GDP fell by 6.1 percent in 2020, the largest contraction since the Asian financial crisis. The tourism sector, which accounts for about a fifth of GDP and 20 percent of employment, has been especially affected by the cessation of tourist travel.
Low-skilled workers and informal and migrant workers have been hit hard, particularly women and the youth, who have suffered disproportionately from diminished employment opportunities in contact-intensive sectors bearing a significant burden of the layoffs observed in 2020. The financial sector has thus far weathered the pandemic well, but stress has been…
