By THE NATION
Though Thailand’s first quarter GDP fared better than expected, the economy during the remainder of the year is expected to see a sharp contraction, with rising unemployment, assistant managing director Nattaporn Triratanasirikul said at press conference today (June 2).
Meanwhile, the overall global economy remains a concern given the high level of Covid-19 infections reported daily and thorny US political issues, both domestic and international, KResearch said while cutting its 2020 GDP projection to minus 6 per cent.
A KResearch survey using a random sampling of 1,000 Thais shows that the respondents are worried about looming uncertainties and this has prompted them to boost savings and tighten spending even more.
As evidenced, household spending has contracted more sharply than the previous estimate, KReasearch said. However, because the level of public debt is not presently a cause for concern, the government still has sufficient fiscal resources to assist ailing businesses after the lockdown has been eased.
The tourism, automotive and property industries are three important sectors that will require more time to recover than others, said Kevalin Wangpichayasuk, another KResearch assistant managing director.
In terms of employment, the government may need to focus its relief measures on the tourism industry, with priority being placed on the most affected travel-related businesses and workers, because the sector employs as many as 4 million people, KResearch said. Overall, major Thai businesses may take more than a year to recover to their pre-Covid-19 levels, it warned.
The Bank of Thailand’s monetary policy is another important tool that could prove useful in case the situation worsens, and there is leeway for further reduction of the policy rate. Nonetheless, the current situation has not yet hit a level that would require the implementation of a negative interest rate policy, KResearch added.