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

[snoop1130]

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

By THE NATION

 

 

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.

 

Source: https://www.nationthailand.com/news/30394513

 

-- © Copyright The Nation Thailand 2020-09-14

 

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[86Tiger]

Dang, the banks are falling all over themselves to predict the worse result...

[LazySlipper]

I just hope that the Thai bht gets back to where it should be. Hard for me to feel pity for anyone or any business when I have lost nearly 500k because of the currency exchange.

[steven100]

more predictions ....   I predict that 99% of these predictions won't be correct.

[Susco]

13 minutes ago, LazySlipper said:

I just hope that the Thai bht gets back to where it should be. Hard for me to feel pity for anyone or any business when I have lost nearly 500k because of the currency exchange.

 

You probably mean, your currency get back to where it was before, but if it is the British pound, I'm afraid that will be a long wait.

 

Not sure how you can lose 500K because of currency exchange either, because once exchanged it doesn't change any more, unless you of course waited until your foreign currency went down the drain before you did the exchange.

 

But you know who to blame for that, don't you?

[LazySlipper]

7 minutes ago, Susco said:

But you know who to blame for that, don't you?

No, I don't.

[Henryford]

36 minutes ago, LazySlipper said:

I just hope that the Thai bht gets back to where it should be. Hard for me to feel pity for anyone or any business when I have lost nearly 500k because of the currency exchange.

No it won't However bad the position is in Thailand in the West it is much, much worse.

[overherebc]

2 hours ago, steven100 said:

more predictions ....   I predict that 99% of these predictions won't be correct.

92% chance you could be on a definite maybe on that one I think but I'm not 100% sure.

[Caldera]

Let me throw out my prediction, while we're at it: Minus 10% this year.

[Poet]

2 hours ago, Henryford said:

However bad the position is in Thailand in the West it is much, much worse.

Economically? How do you reckon?

The advanced economies are impacted, no doubt about it, but they rely on a far broader range of industries than Thailand. Their exposure to the industries that have been decimated - air travel and international tourism - is small relative to the overall size of their economies. The general level of education is high, so, all the people who lose jobs in those industries can be absorbed by others. Some industries, such as anything online, are booming and those companies are disproportionately based in advanced economies. No one in Europe is going to starve or go without medical care.

Sure, all the precautionary measures make for grim TV footage, but that is largely down to an overreaction on the part of politicians terrified they might get blamed for any loss of life. There is no doubt that, right now, day-to-day life is more comfortable in Thailand. Everyone with sense knows, however, that you cannot remove such a massive chunk of the economy (not just the official figures for foreign tourism but, also, the massive unofficial spend that plays a vital role in the poorest regions) without running into series social problems at some point.

It might take another six months to become obvious but Thailand has been running on empty for a while now. Those terrific export figures last month? Mostly families liquidating their gold to take advantage of the high price. People are still spending money because they feel that their jobs are nothing to do with tourism but, behind the scenes, pillars of the economy are in deep trouble.

All those condos blocks colonizing every city and town, the Chinese buyers have simply stopped sending their monthly payments. All those businesses who keep paying their rent in the belief that things will soon be back to normal are beginning to realize that the October return of tourists will not actually happen, and that the numbers aren't going to get back to 2019 levels at any point this decade.

Everything we are experiencing now in Thailand is the calm before the storm. People are still spending because they don't want to think about what is actually happening. When the reality dawns, things will move rapidly and spending will plummet. Unlike Europe, many people here have no safety net, and the ensuing desperation will impact everyone in one way or another, and may even damage Thailand's reputation as a safe destination.

 

Edited September 15, 2020 by Poet

[DaftToPutRealName]

Right on schedule - the slow cooked bad news continues to arrive.

What was it last year? 5%, then 4%, then 3.5% then...?

When does the frog hop?

[Susco]

12 hours ago, LazySlipper said:

No, I don't.

I had figured that already from your previous post.

 

As per the signature from a mod on this forum. I can explain it to you, but I can't understand it for you.

 

In fact, the answer was already clearly written in my first reply, so I think I'm not gonna bother to explain it any further.

[LazySlipper]

46 minutes ago, Susco said:

I had figured that already from your previous post.

 

As per the signature from a mod on this forum. I can explain it to you, but I can't understand it for you.

 

In fact, the answer was already clearly written in my first reply, so I think I'm not gonna bother to explain it any further.

Smart Alec and purveyor of trivia... have at it... yawning...