Thailand’s economy will likely contract 8.5% this year, worse than previously estimated and the biggest decline of any Asian nation this year.

The Finance Ministry’s forecast, released Thursday in Bangkok, compares with a previous projection of 2.4% growth. The new estimate is more in line with the central bank, which expects gross domestic product to shrink 8.1%.

The coronavirus pandemic has pushed Thailand’s export- and tourism-reliant economy into its worst crisis ever, prompting fiscal stimulus of 1.9 trillion-baht ($60 billion) and interest-rate cuts to a record low.

The ministry signaled the worst may be over for Southeast Asia’s second-largest economy, with the contraction likely to ease in the second half of the year, Lavaron Sangsnit, director-general of the fiscal policy office, told reporters. The economy is expected to grow 4% to 5% in 2021, he said.

The benchmark SET Index of stocks fell as much as 1.9% on the news, heading for its lowest close since May 22, while the baht traded little changed at 31.44 to a U.S. dollar.

Other forecasts from the ministry:

• Consumer prices will likely decline 1.3% this year

• Export volumes are forecast to plunge 27.8% -- and their value by 11% -- while the trade surplus is seen at $30.7 billion

• The balance of payments is seen declining to a $13.3 billion surplus this year, from $38.4 billion in 2019

• Exports may grow 5% by value next year

• Second-quarter GDP is expected to contract by double digits

• Imports are expected to fall 14.2% by value and 19.5% by volume this year

Thailand hasn’t detected any locally transmitted virus cases for about two months, but a second wave of infections in several countries is making it difficult for Thailand to open its borders.

“We expect Thailand is less likely to see return of tourists at the end of the year, as travel-bubble talks have disappeared,” said Somprawin Manprasert, chief economist at Bank of Ayudhya, who expects GDP to contract 10.3% this year. “In the next year, the tourism industry will not be able to carry the Thai economy.”

The country is also in the middle of installing a new economic team, including a new central bank governor and finance minister. Sethaput Suthiwart-Narueput, a member of the Bank of Thailand’s Monetary Policy Committee, was named Wednesday as the next central bank governor, after incumbent Veerathai Santiprabhob declined to seek a new term when his expires in September. Following a wave of resignations, Prime Minister Prayuth Chan-Ocha said he will send a new Cabinet list, including a new finance minister, for royal endorsement in August.

(Updates with market reaction in fifth paragraph.)

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