(Bloomberg) -- A technical recession is looming in Thailand after a key government official painted a bleak picture of the economy.

Growth could be less than 1% in January through March from a year ago, mainly because of the chilling impact of the novel coronavirus outbreak on tourism, according to Deputy Prime Minister Somkid Jatusripitak.

Expansion in the fourth quarter of last year may be less than 2%, Somkid told reporters in Bangkok Wednesday.

“The economy slowed in the fourth quarter and the impact from the coronavirus, especially a sharp fall in Chinese tourists, will hurt it hard in the first quarter,” he said.

What Bloomberg’s Economists Say

“Such forecasts suggest the government may be bracing for a technical recession -- back-to-back quarters of negative quarter-on-quarter growth in 4Q 2019 and 1Q 2020. We certainly see this as a significant risk.

“The outlook for the second half is key for salvaging full-year growth in 2020. The stronger the slump in the first half, the greater the potential for a second-half rebound as virus-related demand normalizes.”-- Tamara Henderson, Asean economist

The government is considering steps to spur domestic tourism and consumption, Somkid said. Disbursements from the delayed budget may start in April, and the economy is likely to pick up in the second half, he added.

Tourism accounts for about a fifth of the Thai economy, which is also grappling with a sapping drought and a currency that officials have said remains too strong.

(Updates with comment from economist.)

--With assistance from Clarissa Batino.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editor responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net

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