BANGKOK Reuters - Thailand has good fiscal and financial stability but its economy remains fragile and has limited capacity to withstand shocks due to a severe COVID - 19 outbreak, the country's central bank said on Thursday.
The Southeast Asian country is still experiencing its worst coronavirus outbreak to date, with the vital tourism sector still struggling. The economy suffered a contraction last year after 6.1% and the central bank is anticipating a growth of just 0.7% this year in January.
The good financial stability of Thailand, the stability of its institutions and the strength of its balance of payments are quite good Bank Governor Sethaput Suthiwartnarueput announced a symposium on Thursday.
Despite macro measures indicating the economy is fragile, the Thai economy is not resilient and very fragile, he added. Adding stability would now also need to consider issues other than just economic factors such as social and environmental factors.
In order to survive, Thailand must have the capability and the ability to recover from shocks, Sethaput said.
However, there are limitations in every aspect to make Thai economy not resilient to challenges, he said.
The economic structure is heavily dependent on foreign countries, including for tourism, exports and technology as well as a growing dependency on foreign workers https: www.reuters.org. com article idUSL 4 N 2 OV 0 R 3 due to the ageing society, he said.
the economy has limited capacity to cope with changes due to large informal inequality and high inequality, Sethaput said.
Vulnerable households and businesses are often affected by drastic changes, particularly income losses which create economic scars that will take a long time to recover from and restrain the overall economic recovery, he said.