Thai Economy Expected to Suffer $950M Hit From Quake Impact (International Edition)
The two main research centers anticipate that the recent quake will lead to economic losses ranging from 20 to 30 billion baht for Thailand in the upcoming months.
Yunyong Thaicharoen, who leads the SCB Economic Intelligence Center (EIC), a division of Siam Commercial Bank focused on research, estimates that the crisis will likely lead to approximately 30 billion baht in economic losses within the coming 3-4 months.
On Tuesday, during a seminar on the domestic economic and consumer finance outlook organized by Fitch Ratings Thailand, he stated that after the earthquake on Friday, the main impact would be felt in Thailand’s tourism industry. Specifically, foreign visitor numbers are projected to drop by approximately 400,000 for this month, with a return to typical levels anticipated within roughly three months.
In this situation, the EIC intends to revise its 2025 projection for international tourist arrivals downward from 38.2 million due to the earthquake. This seismic event has caused partial delays and cancellations of flights as well as hotel reservations made by tourists visiting Thailand.
In the meantime, diminished trust among condo purchasers, especially those interested in high-rises, may cause postponements in buying decisions and property transactions. Consequently, EIC has revised its outlook for residential transfers in Bangkok and its vicinity, expecting a 1% decrease year-over-year for 2025 rather than the earlier projected slight increase.
Mr. Yunyong stated that the earthquake would undermine consumer and business confidence, with a particular impact on expenditures and investments in long-lasting products. This decline is anticipated to impose additional limitations on loan expansion within the banking industry.
In the final quarter of 2024, Thailand saw a minor decrease in its household debt-to-GDP ratio to 88.4%, down from 89% in the prior quarter. This decline can be attributed to stricter financial environments, efforts to reduce outstanding debts, and a drop in borrowing requests.
The K-Research center estimates that the economic impact of the earthquake will be at least 20 billion baht, which is roughly equal to a decrease of 0.06 percent in the country’s GDP according to preliminary evaluations.
The primary contributors to these losses encompass interruptions in commercial activities, hold-ups in economic processes, along with a reduction in consumers' buying strength. This shift occurs as families and companies direct their efforts towards evaluating harm and undertaking necessary restorations.
In relation to the banking industry, anticipated financial support measures aim to stabilize general credit conditions, with particular emphasis on sectors such as real estate, construction, and mortgages.
Nevertheless, K-Research indicates that the earthquake might influence corporate bond redemptions for impacted companies in the coming months and could lead to reductions in domestic interest rates due to diminished economic expansion.
The EIC predicts Thailand's GDP growth for 2025 at 2.4%, whereas K-Research forecasts it slightly lower at 2.3%.
Deputy Finance Minister Paopoom Rojanasakul, meanwhile, said he expected the economic impact from the quake would be limited and short-lived. He believes gross domestic product remains on track to reach the 3% target for the year.
Provided by Syndigate Media Inc. ( Syndigate.info ).