Thailand's economy is anticipated to record growth in 2022, but the emergence of the Omicron variant is signaling that the recovery may not be as rosy as expected.
The Kasikorn Research Center projected that Thailand's domestic gross product (GDP) could grow under two scenarios in 2022, according to its latest research.
The base-case scenario predicts 3.7 percent growth under the premise that the Omicron variant will be under control by the first quarter, while the worst-case scenario predicts 2.8 percent growth.
For the worst case, Kasikorn expects that the government would reintroduce lockdown measures to contain a potential new Omicron outbreak, resulting in travel bans both domestic and international.
"At the moment, we still have relatively limited data on Omicron," said Natthaporn Triratsirikul, assistant managing director at the research centre. "However, in the worst-case scenario, the overall pandemic condition is likely better than the Delta variant outbreak that took place in April last year," she said.
Rocky recovery
Thailand once saw almost 40 million of foreign visitors pre-pandemic. But the country is unlikely to reach that level anytime soon as a result of travel restrictions worldwide, analysts predict.
Kasikorn estimates 2021's total foriegn arrivals will hit 350,000, while it predicts a range of 2 to 4 million visitors next year, depending on the severity of the Omicron variant.
"Thailand will lose 70-80 billion baht of tourism income for every one million visitors missing," reads the report.
According to Kiatnakin Phatra (KKP), another research unit, Thailand's tourism industry will face great challenges following its reopening. One of the leading concerns is the disappearance of Chinese tourists who before the pandemic generated a substantial income to the economy.
"Although Thailand was among the first countries to welcome visitors, there are still sizable constraints on international travel," said KKP. "This will result in a modest rebound for the tourist sector in early stages."
The latest government's projection from the National Economic and Social Development Council (NESDC) forecasts 2022 GDP growth at 3.5-4.5 per cent. However, Omicron's impact on the economy has not yet been determined.