Last Friday’s earthquake in Myanmar, which sent strong tremors across Thailand, has caused economic damage estimated at about 20 billion baht and may cause Thailand’s GDP forecast for this year to drop by 0.06%, to under 2.4%, according to the Kasikorn Research Centre.
The GDP projection may drop by another 0.3% if the Trump administration decides to impose 25% tariffs on Thai exports to the US market this Wednesday, said the centre.
The earthquake’s economic damage assessment is based on the suspension or delay of economic activities, particularly in the service sector in and around Bangkok and Chiang Mai.
Household purchasing power is expected to decline, because many people may have to use their cash reserves to hire inspectors, to check damage to their houses or condominium units, and for repairs, according to the research centre.
The centre notes, however, that the horizontal housing market may benefit from the earthquake, as home buyers may look at traditional houses, instead of rooms in skyscrapers, over safety concerns.
Purchases of condominium units in Bangkok, which are currently slow, may decline further as a result.
The centre also predicts a drop in the number of foreign tourists, with the likelihood that the projection of 37.5 million arrivals for this year may have to be adjusted down.
Against the backdrop of the trade war, being waged by the Trump administration, and the impacts of the earthquake, the centre predicts that the Monetary Policy Board of the Bank of Thailand may bring forward a further cut in the policy interest rate, by another 25 basis points, to April, with another cut during the second half of the year.
NPLs in the real estate and construction sectors, which tended to reduce after the COVID pandemic, are likely to pick up again by the end of this year, said the Kasikorn Research Centre.
