Recovery in Thailand Likely After 2003, Says World Bank Report by Phairath Khampha 21 February 2000 Thailand must wait until 2003 before pre-crisis levels of consumption can be achieved, suggesting that the 1997 economic crisis would take seven years to cure. According to a report by the World Bank's Thailand Economic Monitor, published in February 2000, the Thai economy began to recover at a growth rate of 4 to 5 percent in 1999, after a contraction of 2 percent in 1997 and 10 percent in 1998. According to this report, "conservative estimates suggest that the economy will continue to grow at an average rate of 4 to 5 percent per year. Given a population growth rate of roughly 1 percent per year, the economy is expected to regain its pre-crisis level of output per capita by 2002, and the pre-crisis level of consumption per capita by 2003. " However, only sustained economic growth would help reduce the poverty level, which peaked at 13.1 percent of the total population in 1998, at the height of the economic crisis, and by 2002, the report predicts the poverty level should have fallen to around 11.4 percent. "Given the population growth, the absolute number of poor will remain close to pre-crisis levels, at around seven million," the report says. The economic crisis has also affected the household income and consumption of Thai families across different groups, particularly households headed by females. Between 1996 and 1998 real income per capita declined by 13 percent for the whole country. Individuals residing in female-headed households saw their real incomes decline by 14.4 percent, while those in male-headed households experienced an increase of 1.8 percent. Over the same period, urban per-capita incomes also fell more than rural incomes, 5 percent versus 2.3 percent. It was found that discretionary consumption had fallen among those both above and below the poverty line, being cut back in household spending budgets to allow enough money for essentials such as food, shelter, fuel and lighting. The largest decline in discretionary consumption was on alcohol and tobacco, followed by clothing and footwear, medicine and medical services, transport and communication and personal care. "The large decline in real per-capita expenditure on medicine and medical services [29 percent] is of concern, as this may reflect a reduction in the use of health services by individuals, which in turn could compromise their health status," the report said. "However, other evidence suggests that the reduction in health expenditure was achieved largely by shifting from private [more expensive] to public [less expensive] providers of medical care and not because of a reduction in the use of health services." To maintain consumption levels, households had taken on more debt, the report finds, the percentage of the population incurring debt having increased from 53 percent in 1996 to 58 percent in 1998. The intensity of debt also increased, it concluded, with outstanding debt on average more than five times larger than income, and in the case of those below the poverty line more than 8.5 times larger.