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World Bank Throws Water on Rosy Thai Economic Forecasts, Sees only 1% Growth

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The World Bank isn’t as rosy on Thailand’s economy as Thailand’s bureaucrats are.

Following Thai government forecasts of 1.5 percent and 1.2 percent growth in 2021, the World Bank’s latest Thailand Economic Monitor “Living with Coviid in a Digital World” sees only 1% growth in 2021.

According to the report published Tuesday, the adoption of digital technologies has the potential to support Thailand’s recovery from Covid-19 and ensure a more competitive economy over the longer-term.

Economic activity is expected to return to its pre-pandemic levels end-2022, with progress on vaccinations and a resumption of tourist arrivals providing support for the recovery.

Growth is projected to accelerate to 3.9 percent in 2022 and 4.3 percent in 2023, driven by a recovery in service sector activity.

If the current pace of vaccinations of around 750,000 per day is maintained, and in the absence of a further resurgence of Covid-19, consumer confidence and international tourist confidence is expected to strengthen.

“While scarring from the pandemic shock could be long-lasting, especially in terms of job losses and school closures,” said Birgit Hansl, World Bank Country Manager for Thailand. “Digital-led development can help offset these scarring impacts can ensure that growth is inclusive and equitable.”

Since the pandemic started in March 2020, 30 percent of all digital service consumers in Thailand were new and consumption among internet users was 90 percent, the second highest in the region after Singapore.

According to the report, the pandemic has accelerated the adoption of digital technologies in Thailand, in large part as a response to extended mobility restrictions and to keep operations running.

The report recommends that while the government has taken several steps to advance the digital agenda, more can be done to develop digital services and spur the digitalization of businesses.

This includes promoting competition and incentivizing interoperability in digital markets, raising the availability of digital and complementary skills, and enhancing access to innovation finance.