Thailand’s financial system has become more vulnerable due to the more-than-expected contraction of the country’s economic outlook due to impacts caused by the COVID-19 pandemic, according to the Bank of Thailand (BoT).

The Bank of Thailand (BoT) (Photo: https://www.thailand-business-news.com/)

At a meeting on 8 July, the BoT assessed that the Thai economy will contract by 8.1% in 2020 but would expand by 5.0% in 2021 in tandem with a gradual improvement in both domestic and external demand.

The BOT’s monetary policy committee deemed it important to prepare financial measures to continuously alleviate impacts on households and businesses, especially after the phase-outs of the batch of financial and credit measures.

According to the BoT, fiscal and credit measures, monetary support policies and efforts to accelerate the debt restructuring process still have a key role in supporting Thailand's economic recovery.
The bank said Thailand did not face deflation risks, although its inflation rate is expected to be negative 1.7 percent this year.

Thailand's economy is said to fall into recession after its GDP fell by 1.8% in the first quarter of 2020 - the sharpest decline since the fourth quarter of 2011.

The Asian Development Bank (ADB) has forecasted that Thailand's economy will fall by 6.5% this year, the sharpest decline among members of the Association of Southeast Asian Nations (ASEAN).

Source: VNA