THAILAND'S economy is expected to return to 2019 levels by the end of next year, according to a World Bank estimate.
The Thai economy is now expected to have a GDP growth of 3.9 per cent next year, up from one per cent this year.
According to a Bangkok Post report, Thailand's economy bottomed out in the third quarter of this year, but has been picking up since.
World Bank's senior economist for Thailand, Kiatipong Ariyapruchya, said progress on vaccination and the resumption of tourist arrivals would continue to help support the Thai economic recovery.
He said Thailand's economic activity was expected to return to pre-pandemic levels by the end of next year, while the country's GDP growth rate was projected to accelerate to 3.9 per cent next year and reach 4.3 per cent in 2023, driven by a recovering service sector.
The World Bank left its estimate for 2021 Thai GDP growth unchanged at one per cent.
Kiatipong said that if the current pace of vaccinations remains at around 750,000 doses per day and there was no further resurgence of Covid-19, domestic consumer confidence and international tourist confidence are expected to strengthen.
"Given these conditions, private consumption is projected to expand by about four per cent per year in 2022 and 2023, up from an estimated one per cent in 2021."
While the number of foreign tourists is expected to be negligible this year, Kiatipong said he expected international arrivals to reach almost seven million in 2022.
Tourism authorities are hoping to see about eight to 15 million tourist next year.
A sharp increase in arrivals is expected in the second half of next year, before increasing further to around 20 million arrivals in 2023.
However, it still pales in comparison to 2019 figures when Thailand saw some 40 million foreign tourist arrivals.
With recovery signs for tourism looming on the horizon, the sector is expected to contribute two percentage points to GDP growth in 2022 and four percentage points in 2023.
However, Kiatipong said the Thai economy still faced a downside risks based on several uncertainties both internationally and locally.
This is because the global trajectory of the pandemic remains unpredictable, and the probability of future waves of Covid-19 in Thailand will depend on continued progress with the vaccination rollout.
He said Thailand needed to monitor the effectiveness of vaccines against new strains of the coronavirus, as well as continue to implement other preventive, testing and tracing measures.
The sustained reopening of international borders will undoubtedly affect the country's tourism and GDP growth, said Kiatipong.
"In case a new wave of a Covid-19 variant occurs, causing the government to use rigid containment measures or even a lockdown, the Thai economy is likely to contract by 0.3 per cent in 2022," he said.
"In this event, an economic recovery is expected to be delayed by one year."
Meanwhile in a related development, World Bank country manager for Thailand Birgit Hansl said Thailand's poverty rate was set to remain stable at 6.4 per cent in 2021.
It is estimated that some 160,000 people have slipped into poverty since the onset of the pandemic last year.
A recent 2021 World Bank household phone survey indicated that the impact of the pandemic has been particularly severe on vulnerable groups.
More than half of the 2,000 respondents said they were affected by job losses, temporary work stoppages, and reduced working hours or lower pay.
Hansl said effects of the pandemic could be long lasting, especially in terms of job losses and school closures.
However, she said a digital-led development can help to offset these impacts and ensure that growth is inclusive and equitable.
The report recommends that while the government has taken several steps to advance the digital agenda, more can be done to develop digital services and spur the digitalisation of businesses in Thailand.