Last Friday’s earthquake in Myanmar, which caused strong tremors in Thailand, is estimated to have caused economic damage of about 20 billion baht, potentially lowering Thailand’s GDP forecast for this year to under 2.4%.
Key Points
- The recent earthquake in Myanmar has caused an estimated economic damage of 20 billion baht in Thailand, potentially lowering the country’s GDP forecast for this year to under 2.4%.
- The Kasikorn Research Centre predicts a further drop in Thailand’s GDP by 0.3% if the Trump administration imposes 25% tariffs on Thai exports to the US.
- The earthquake and the ongoing trade war may lead to a decrease in household purchasing power, a shift in preference towards traditional houses over condominiums, a potential drop in foreign tourist arrivals, and an increase in non-performing loans (NPLs) in the real estate and construction sectors by the end of the year.
The Kasikorn Research Centre also predicts a further drop of 0.3% in GDP if the US imposes 25% tariffs on Thai exports. The earthquake’s damage assessment is based on suspended or delayed economic activities, particularly in the service sector in and around Bangkok and Chiang Mai.
The centre expects household purchasing power to decline and the horizontal housing market to benefit, as people may prefer traditional houses over skyscrapers due to safety concerns. The number of foreign tourists is also predicted to drop, potentially adjusting the projection of 37.5 million arrivals. Amidst the trade war and earthquake impacts, the centre predicts the Bank of Thailand may cut the policy interest rate by another 25 basis points in April, with another cut in the second half of the year. Non-performing loans (NPLs) in the real estate and construction sectors, which had decreased after the COVID pandemic, are likely to rise again by the end of this year.
