THURSDAY, March 28, 2024
nationthailand

SCB forecasts greater contraction of Thai economy in aftermath of Covid-19

SCB forecasts greater contraction of Thai economy in aftermath of Covid-19

Thailand’s gross domestic product (GDP) in 2020 is expected to contract 7.8 per cent from the previous forecast of -7.3 per cent due to increasing negative factors that stem from the impact of Covid-19, Siam Commercial Bank’s Economic Intelligence Center (EIC) said on Monday.

Two prominent negative factors cited by the EIC were the decrease in estimates of foreign tourists in 2020 to only 6.7 million people, as the government still employs strict lockdown measures against foreign tourists, and only Bt500 billion of the Bt1-trillion stimulus that the government had passed was expected to be injected into the economy within this year, lower than the Bt600 billion previously estimated.
Other factors are the scarring effects caused by businesses being shut down and people being laid off due to the outbreak, which could prolong the country’s economic recession until the year-end or next year.
“In the first two quarters of 2020, the unemployment rate increased by 1.95 per cent, which is the highest in 11 years,” said the centre. “Meanwhile, those who still have jobs tend to suffer from decreased working hours, which are currently down by 11.5 per cent year on year, while some have to be underemployed in order to keep working.
“The number of furloughed workers could rise to 2.5 million people, reflecting the weak status of the labour market,” it added.
The EIC said that the scarring will take time to heal, and therefore the Bank of Thailand should continue to employ relaxed financial policies, such as keeping the policy rate at 0.5 per cent, promote debt restructuring measures and provide soft loans and credit guarantee tools to ensure that affected businesses could access funds and gradually get back on their feet.

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