Bangkok (VNA) - Despite relatively effective containment ofCovid-19, the impact of the pandemic on Thailand's economy has been more severethan expected and economic recovery remains elusive, with annual GDP poised toshrink by 8 percent, says the Asian Development Bank (ADB).

The latest projection is a big dip from the bank's April forecast of a 4.8percent contraction, local media reported.

External demand weakness is likely to continue in the near term, the BangkokPost newspaper cited a report titled "Asian Development Outlook 2020 Update:Wellness in Worrying Times". Even with trade partners gradually recoveringas the COVID-19 situation allows them to relax containment measures, economicactivity is projected to remain significantly below pre-pandemic norms in manycountries.

Thailand's earnings from exports of goods and services are now projected tocontract more deeply in dollar terms, by 22.3 percent in 2020, then rebound to7.6 percent growth in 2021, according to the ADB.

The deeper export contraction will weigh on private consumption and investment.Private investment is now expected to contract by 12.1 percent in 2020, thenrecover with 4 percent growth next year, the ADB said.

Weak demand at home and abroad, excess production capacity and persistentuncertainty about the course of the pandemic will undermine business confidenceand hamper investment this year, said the Manila-based lender.

Public spending seems to be almost the sole economic driver this year.

Public consumption is now expected to expand by 3.8 percent, revised up from2.4 percent projected in April, due to speedy disbursement of relief spending,the ADB said.

Meanwhile, public investment is predicted to expand, especially ininfrastructure projects for state-owned enterprises, and this will be the keyto sustaining the economy to the forecast horizon, the bank said.

The ADB forecasts Thailand's GDP to grow by 4.5 percent in 2021./.