Krungsri Research points out that Omicron outbreak may slow Thai economy recovery

Krungsri Research indicates the outbreak of Omikron. may cause the Thai economy to recover slowly While inflation is likely to increase in the first quarter of the year

Krungsri Research estimates that the Thai economy in the first half of the year faced challenges from the Omikron outbreak. affect the continuity of recovery. From the latest economic indicators in November 2021 reflecting the overall economic improvement in almost every sector. The export sector grew high (+23.7% YoY) following a recovery in demand from trading partners. while the tourism sector The number of foreign tourists increased to almost a hundred thousand people. After the official opening of the country to welcome tourists under Test & Go measures since November 1, private consumption continued to recover (+0.9% MoM_sa) after the epidemic situation in the country and increased vaccination. support economic activities and consumer confidence to recover Likewise, private investment (+4.3%) benefited from a recovery in domestic and international demand

The situation of the number of COVID-19 cases in the country that has recovered sharply after the New Year holiday especially the outbreak of the Omikron species. Recently, Krungsri Research has predicted the number of infected people from the SIR model in 3 cases:

(i) Base case, the number of daily infected people will increase to a maximum of almost 11 thousand in the middle of the month. February before the decline slowly Daily death toll peaked at around 50 at the end of February.

(ii) Worst case, the daily number of infections peaked at 16 thousand at the end of February and there were The highest daily death toll at approximately 100 people

(iii) worst case. The booster vaccine does not prevent infection. This resulted in the highest number of daily infections of about 32 thousand cases in mid-February. And there are up to 300 deaths per day

. Under the assumption that different levels of austerity were implemented measures. In the base case, the austerity of the measures was slightly higher than in the pre-Omicron epidemic period. The worst case Strict control measures may be reinstated. Krungsri Research assesses the impact on both the tourism sector’s economic activities and the domestic economic activities. In all three cases, the trend was down 0.6%, 1.4% and 3.0%, respectively. However, this forecast does not include additional factors such as the positive effects of economic stimulus measures. (This may cause the overall GDP to be slightly lower than the original forecast)

December headline inflation slowed slightly. but still tends to increase in the first quarter Headline inflation in December was 2.17% YoY, decelerating from 2.71% in November. Important factors from the measures to fix the price of diesel fuel while the price of fresh food products rose slightly. According to the rising price of pork Core inflation In 2021, headline and core inflation averaged 1.23% and 0.23%, compared to -0.85% and 0.29% in 2020, respectively.

Krungsri Research expects inflation to continue to rise and hit a peak near 3% in the first quarter of 2022, before gradually slowing back to near the lower bound of the target inflation frame by the end of the year. This is partly due to the very low base in the first quarter of 2021, coupled with global commodity prices. In particular, crude oil prices have risen to a high level. However, the transmission of costs to product prices may still be limited. This is because the recovery of the Thai economy is still fragile from the COVID-19 outbreak in the country from the Omicron strain. In 2022, headline inflation is expected to average at 1.5%