MPC closely watching Omicron – key risk to the economy
The Covid-19 Omicron variant poses a major risk to the overall economic outlook and needs close monitoring, the Monetary Policy Committee (MPC) said on Wednesday.
The MPC expects the economy to expand by 0.9 per cent in 2021, up by 0.7 per cent the previous year.
The revised forecast increased by 0.2 per cent as a result of better economic growth in the third quarter.
In 2022, the economy is expected to grow at 3.4 per cent, down from the previous forecast of 3.9 per cent, because of two important factors – the number of tourists have decreased due to the Omicron outbreak and the global economy is tending to slow down from the outbreak.
In 2023, the Thai economy is expected to expand 4.7 per cent due to recovery in domestic spending and increased numbers of foreign tourists who will gradually return, according to the MPC.
Piti Disyatat, assistant governor for monetary policy at the Bank of Thailand, said the MPC expects a gradual recovery in tourist numbers early next year.
Therefore, strict measures (including suspending the Test & Go scheme) would not have a great impact while many tourists are expected to come back in the second half of next year.
Meanwhile, various business sectors are expected to recover in line with increased economic activity, though the economy could be affected in the first half of the year.
The impact may become more severe and prolonged than expected depending on the severity of the situation and control measures.
