Pattaya reels as Thai economy shrinks most in 22 years in 2Q

Pattaya reeled as Thailand’s economy shrank the most in 22 years in the second quarter, with gross domestic product plunging 12.2 percent.

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The Office of the National Economic and Social Development Council said the April-June quarter marked the largest three-month downturn since the kingdom recorded a 12.5 percent contraction during the Asian Financial Crisis.

On a seasonally-adjusted basis, the economy shrank by 9.7 percent in the second quarter. That followed a 2.5 percent shrinkage in the first quarter and a 0.3 percent slide in the last quarter of 2019, confirming Thailand is now in a recession that could take two years to emerge from.

Economists consider two consecutive quarters of GDP contraction a recession.

The steep drop in GDP was expected, with government officials saying the economy “bottomed out” in the quarter and is now on the upturn.

That’s hard to believe to look at Pattaya where pubs and bars across the city that once opened at 10 a.m. now keep their doors closed until 7 p.m. and close at midnight.

Many hotels and restaurants have not reopened at all, as it is cheaper to remain closed than operate in a city without foreign tourists.

Workers in the country’s Social Security system have been able to collect unemployment benefits, but 64 percent of Thailand’s workforce is in the “informal” sector – such as taxi drivers, street vendors and go-go bar dancers – and do not qualify.

Cash handouts for informal workers have expired and are not expected to be renewed.

Don Nakornthab, a NESDC senior director, said that the economy rebounded in June as the country lifted its economic shutdown and should continue to improve in the third quarter now underway.

Forecasts for Thailand’s full-year economic slide are dire, however.

The NESDC predicts a yearly GDP contraction of 7.3-7.8 percent. The Joint Standing Committee on Commerce Industry and Banking last week forecast that GDP would contract 8.5 percent this year while the University of the Thai Chamber of Commerce predicted a historic 11.5 percent full-year shrinkage.

A version of this story originally appeared in the Bangkok Herald.