Thailand heading towards recession as Covid-19 ravages world economy

By The Nation

 

People queue up to buy eggs, face masks and other necessities provided by the Commerce Ministry's mobile unit in front of a Big C store in the Saphan Khwai area on Sunday. Face mask stocks are in short supply due to high demand, driven by public panic about the Covid-19 virus spreading. Nation Photo/ Kunlaphun Siripimamporn.

 

Thailand will fall into an economic recession in the first half of this year and the middle- and lower-income groups will be hard hit, an economist has warned.

 

"There is high chance that the country will be in a technical recession -- contraction of the economy for two consecutive quarters," said Anusorn Tamajai, director of Economic and Business Research Centre at Rangsit University.

 

The Thai economy has been largely impacted by slower growth as the coronavirus has spread globally.

 

The Thai economy in the first quarter -- from January to March -- is expected to contract by 2 per cent year on year. The second quarter will also see negative growth, he warned. The Thai economy last year grew 2.4 per cent for the full year.

 

Middle-income and lower-income groups are expected to be hit hard as tourism and small business are severely impacted by the Covid-19 outbreak, he said. It is unlike the 1997 crisis when large businesses were hit as they borrowed too much, he said.

 

During the Asian financial crisis of 1997, the Thai economy sank almost three per cent in 1997 and then sharply contracted by 7.6 per cent in 1998.

 

Thailand also faced a technical recession during the global financial crisis in 2008-09, then again in 2013 and 2014, he said.

 

During the Asian financial crisis in 1997-1998, Thailand faced an economic crisis and growth contraction for four consecutive quarters.

 

He said that this year, recession will be less severe than in 1997-98, and added that projection is difficult while the virus continues to spread worldwide.

 

He said the government’s planned stimulus package may lessen the burden for people and small businesses in the short-term.

 

However, as the government has often launched stimulus packages, it may erode the financial position of the country in the long run. Thailand's fiscal base is not as strong as that of Singapore and Hong Kong, said Anusorn.

 

The government plans to hand out Bt2,000 each to low-income people, estimated to be about 14 million. Anusorn said to make it effective, the government should target those currently holding State Welfare cards and members of the National Savings Fund.

 

The stimulus may boost the economy by 0.015 to 0.03 percentage point, preventing it from contracting by more than two per cent.

 

He did not agree with any government plan to allow employers to delay their contributions to the Social Security Fund. The government should find other ways to lessen cost for business, he said.

 

The government can boost confidence by making sure the government could deal with the virus outbreak effectively. The government should also uphold the rule of law and democracy, he added, apparently referring to several recent scandals related to Cabinet members and law enforcement.

 

Source: https://www.nationthailand.com/business/30383648

 

-- © Copyright The Nation Thailand 2020-03-09

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The government should also uphold the rule of law and democracy, he added

 

Someone slap this guy and wake him up from his dream. 

The rot set in last year.  Our village has seen long time company people returning after being laid off,  several uni graduates twiddling their thumbs for many months or still twiddling.  It's to do with Baht being high and slow growth in export countries. Now with the virus we have a poison icing on a bitter cake!

The slow down started last year in low season the virus is speeding it up right now the low season is looking like a disaster on the horizon

The Thai were so sure the Chinese would always come by the plane loads, the baht would always stay strong, and the economy would always be booming.  Yeah, well, sometimes reality bites.  Hard!

The recession started in 2017/2018 - the real recession.  There are two economies in Thailand.  One is directly controlled by the junta and directly affects the wealthy - it has been doing OK because of all the government expenditures on projects and equipment - but the economic crash because of wuhanvirus is now affecting it.  The second economy is the real one built on tourism and exports and all the subsequent economic activities - this is the one that directly affects the majority of Thais - and it has been declining since 2018.  It was just a matter of time before the Govt expenditure driven part of the economy declined - this virus and associated worldwide economic decline has made the inevitable happen quicker.  

I received an email yesterday informing me on change of flight from Dubai to Bangkok as vacant seats on my original flight so now leave 35 minutes later, People are so quick to act on this current problem, just imagine if the world reacted to other pressing issues the same way , what could be achieved.

36 minutes ago, Just1Voice said:

The Thai were so sure the Chinese would always come by the plane loads, the baht would always stay strong, and the economy would always be booming.  Yeah, well, sometimes reality bites.  Hard!

It appears the baht is still remaining strong.

I can't think of any economy that won't be heading for recession in the current climate of fear. Nothing unique about Thailand.

10 minutes ago, Peterw42 said:

It appears the baht is still remaining strong.

Give it a couple of weeks. 

Thailand’s economy has been in decline even before the virus. All the virus has done, is speed things up.

Look at the photo,she looks to me to have gone stage 2; Zombiefication, jeez hope my motorcycle leathers arrive soon,already have six inch nails in my baseball bat.

4 minutes ago, khunpa said:

Thailand’s economy has been in decline even before the virus. All the virus has done, is speed things up.

And given them an excuse for failure.

3 hours ago, webfact said:

It is unlike the 1997 crisis when large businesses were hit as they borrowed too much, he said.

Don't think Thai banks and business are as over-leveraged as the average Thai citizen?  Think again.  The upcoming smack-down could become as bad as 1997.  Sow arrogance as well as xenophobia, what does one expect to harvest when it's no longer a seller's market.

15 hours ago, Grumpy John said:

The rot set in last year.  Our village has seen long time company people returning after being laid off,  several uni graduates twiddling their thumbs for many months or still twiddling.  It's to do with Baht being high and slow growth in export countries. Now with the virus we have a poison icing on a bitter cake!

???? I would say even before last year though .The overvalued baht was hitting the economy for awhile now.

 

 

Edited March 9, 20206 yr by findlay13

A recession would crush this government....they wouldn't have the slightest idea of what it means!

Somkid will crawl under the rug and Prayuth will deny it's happening.....and what ever....it'll be fake news spread by FB!

Thailand? The whole world goes into recession (or already is).

They bet their hand on those Chinese arrivals but the only thing that came was the virus....game over now

price gouging? Haha the local pharmacy has taken those large bottles of alcohol that sold for 20 baht and poured them into 6 smaller Bottles that he sells for 50 baht each.... haha Thailand supply demand curve. The MONEY 

Only 6mio less tourists is very optimistic.If covid19 stays another 6 month I guess then Thailand can be happy if they reach 20mio visitors,20mio or 50% less tourists this year.In Europe and USA the impact of covid 19 just kicks in,and China will probably needs a while to recover from the virus.If the virus stays longer than 6 months.......

14 hours ago, khunpa said:

Thailand’s economy has been in decline even before the virus. All the virus has done, is speed things up.

It started 5 years ago when the Junta tried to work out how to steer a country's economy.

I predict the following Junta based story.

 

Thailand's 2020 economy beats world' recession.

Thailand continues to beat the world recession with a booming export business and growing tourism whilst the rest of the world continues it's decline. Thai Ministry says this was due to great planning, populace support and amulets.

 

 

1 minute ago, RichardColeman said:

I predict the following Junta based story.

 

Thailand's 2020 economy beats world' recession.

Thailand continues to beat the world recession with a booming export business and growing tourism whilst the rest of the world continues it's decline. Thai Ministry says this was due to great planning, populace support and amulets.

 

 

 

tying that to the current problems:

 

the local economy will recover - if all Toilet paper and Sanitisers sales are sourced from local manufacture  

 

 

54 minutes ago, ChrisY1 said:

A recession would crush this government....they wouldn't have the slightest idea of what it means!

Somkid will crawl under the rug and Prayuth will deny it's happening.....and what ever....it'll be fake news spread by FB!

Rubbish, half the countries in the developed world will be in recession also.

thailand is not the only victim. many economies are headed that way. it is survival that is important at this stage. development can come later.

There's an excellent article in today's Bangkok Post which details all the failings of the government.

 

Worth a read.

3 minutes ago, anchadian said:

There's an excellent article in today's Bangkok Post which details all the failings of the government.

 

Worth a read.

+1  She's got some guts, a well written piece.

18 hours ago, webfact said:

Thailand will fall into an economic recession in the first half of this year and the middle- and lower-income groups will be hard hit, an economist has warned.

If it was honest it was heading or in a recession last year, this year it's in dire straits!

Have they taken into account the fact that their second-largest sector, agriculture, is also in crisis due to the worst drought in half a century?

In every country resession starts from the bottom and works its way up and affluence and economic boom starts from the top and works its way down

Why this comes as a surprise? I am saying this for a couple of years now that 1997 will come again; just this time NOT to the gain of the really wealthy in the country...