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Falling economy has bottomed out, says BOT

Aug 01. 2020
Don Nakornthab, BOT senior director
Don Nakornthab, BOT senior director
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By The Nation

The falling economy has bottomed out, but unemployment remains a serious concern, said the Bank of Thailand (BOT) today.

Don Nakornthab, a BOT senior director, said five economic engines – consumption, private investment, exports, imports, and manufacturing – showed signs of improvement in June although all remained in negative growth territory.

These indicators suggested the economy had bottomed out and, if the recovery continue, the central bank may revise upward its GDP projection, he said. The BOT’s current 2002 GDP projection is for a contraction of 8.1 per cent.

He predicted that GDP in the second quarter (April to June) may contract in a range of 12 to 13 per cent, close to the historic plunge of 12.5 per cent in the second quarter of 1998 during the Asian financial crisis.

Easing of lockdown restrictions contributed to the economic improvement in June, he said.

However, if a second wave of Covid-19 infection occurs and leads to another big lockdown, economic recovery would be further disrupted, he pointed out.

Despite some improvement last month, the economy remains deep in negative territory, with unemployment the biggest concern, he warned. The number of workers applying for unemployment benefits has been rising. Some observers estimate it could rise to 5 million, or about 10 per cent of the total workforce, said Don.

Separately, Supachai Panitchpakdi, former director-general of the World Trade Organisation (WTO), said the Thai and Asean economy are expected to recover by the end of this year, but trade may still contract. Trade in food, communication and medical equipment may recover first, said Supachai, who is also a former secretary-general of the UN Conference on Trade and Development (UNCTAD). Risk of declining trade would persist for the next one or two years, he added.

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