Goldman: Cautious, Current A/c Could Slip To Deficit For 1st Time In 8 Yrs

Goldman Sachs note that have just completed their virtual tour of Thailand, "which is currently experiencing a severe virus wave that prompted the government to reimposed movement restrictions in most parts of the country. The pace of vaccination has been slow. Although Thailand has secured 80mn doses (vs. total population of 70mn), it features one of the slowest vaccine rollouts in the region: most the supply will be delivered in 2021H2 and so far only 2mn doses have been administered. Given the virus and vaccination pace uncertainty, the Bank of Thailand (BoT) outlined three growth scenarios, which they link directly to the immunization path. In their base case, 65mn vaccine doses are procured and distributed this year, in which case tourism arrivals are expected to be just 1mn (down from 3mn previously forecasted) and GDP is expected to be 1.5% in 2021. At their March meeting the BoT forecast that the current account would be US$1bn (or 0.2% of GDP), which was based on 3mn tourist arrivals. Our expected climb in commodity prices and a downward revision to tourism arrivals together suggest that Thailand's current account could slip into deficit this year. Given this, and given expectations that bond and equity flows are likely to be moderate, we think THB should continue to underperform its NJA peers."