Posts falsely claim the World Bank warned Thailand of economic collapse after the pandemic

Multiple Facebook posts shared hundreds of times in early July 2022 claim the World Bank has warned that Thailand’s economy is on the verge of collapse after being hit during the pandemic. That’s wrong. The World Bank told AFP it had not issued any such warning and last month forecast the kingdom’s economy would grow over the next three years as private consumption and tourism recover. Independent economists said the country’s economy is currently not in danger of bankruptcy, despite challenges such as high inflation and debt.

The demand was shared here on Facebook on July 7, 2022. It has since been shared more than 1,000 times.

The Thai-language post translates into English as follows: “Shock!! World Bank warns Thailand: Thailand’s economic system is collapsing completely.”

The same claim was shared on Facebook here, here, here and here.

Thailand’s economy has been hit hard during the pandemic, suffering its worst performance since the pandemic 1997 Asian financial crisis.

However, it rebounded and grew 2.2 percent in the first quarter of 2022 after Southeast Asia’s second-largest economy eased its pandemic restrictions, a significant turnaround from a 6.1 percent contraction in 2020, AFP reported.

The World Bank told AFP that it had not issued a statement nor warned of Thailand’s impending economic collapse.

Kanitha KongrukgreatiyosWorld Bank Thailand Office Foreign Representative said: “The claims shared in the misleading social media post are not from the World Bank.”

According to June 2022, the kingdom’s economy is projected to grow by 4.3 percent and 3.9 percent in 2023 and 2024, respectively projections published by the World Bank.

For 2022, the World Bank said Thailand’s economy is expected to grow 2.9 percent, buoyed by private consumption and a recovery in tourism.

Growth expected despite risks

Thailand’s economic outlook does not point to a collapse despite some existing risk factors, said Dr Somchai JitsuchonResearch Director for Inclusive Development at the Thailand Development and Research Institute.

“There is no indication that this could happen in the near future. Sure there are risks, but not as serious as bankruptcy,” he told AFP.

“The return of tourists to Thailand will help the baht recover, which will also have a positive impact on the economy.”

Somchai said factors such as high government and household debt, inflation and the value of the Thai baht may pose risks, but are not currently serious enough to fear bankruptcy.

The national debt – currently at 60 percent – would shrink after the economy expanded and the Bank of Thailand took measures to moderate and control inflation rates, which are at their highest level in 13 years, Somchai said.

“With the economy recovering as Thailand moves out [the pandemic]there are factors to suggest that we are not dealing with a runaway inflation phenomenon in Thailand,” he said.

“Although household debt could spiral out of control if interest rates and [public debt] increased, current forecasts do not point to an “uncontrollable increase,” Somchai said.

Stable prospects

The international rating agency Fitch Ratings was also retained Creditworthiness of Thailand at “BBB+” – indicating a stable outlook in June 2022.

It forecast economic growth of 3.2 percent, supported by improved domestic consumption, supportive policies and a slight recovery in inbound tourism.

“Thailand’s ratings are underpinned by the country’s continued strength in external financing and the strong macroeconomic policy framework,” the agency said.

According to the country’s central bank, Thailand foreign exchange reserves stood with us$221.8 billion from July 1, 2022.

foreign exchange reserves are assets held by a country’s central bank and used to meet liabilities and influence monetary policy.