Standard Chartered Bank (Thai) views exports as the key engine to support the Thai economy this year and drive growth next year.
Thailand’s exports experienced strong growth at 44% year-on-year in June, up from 38% in May. The country’s exports have been growing with a broad base, led by the automotive and electronic sectors. For the year to date, exports have increased more than 10%, supported by a global economic recovery and baht depreciation.
Given vaccination progress worldwide, herd immunity is expected by the end of this year, said the bank.
“With the growth of exports, the government needs to contain new infections and speed up vaccinations to prevent the spread from affecting the manufacturing sector and slowing shipments,” said Standard Chartered economist Tim Leelahaphan.
Containment of Covid-19 and vaccinations are key factors supporting a Thai economic recovery. The bank maintains its GDP growth forecast for Thailand at 1.8%.
Standard Chartered expects the country’s growth rate to be 3.1% in 2022.
Mr Tim said the Phuket sandbox tourism scheme provided positive signs. Since opening on July 1 this year, more than 10,000 foreign tourists have visited the island, with only around 20 infections.
The government hopes to open attractions in other provinces by year-end. He said the tourism sector is expected to gradually pick up, but it needs time, especially hotels.
Standard Chartered predicts the Monetary Policy Committee (MPC) will maintain its policy rate at 0.50%. The central bank is expected to keep the policy rate until 2023 because of economic uncertainties. However, it will not be surprising if a member of MPC votes to cut the rate at next Wednesday’s meeting, said Mr Tim.