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Covid-19 and the economy: Thai takes bigger hit than 1997 crisis - three million could be unemployed by year end

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Covid-19 and the economy: Thai takes bigger hit than 1997 crisis - three million could be unemployed by year end

 

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The Thai Chamber of Commerce has painted the grimmest assessment yet of the state of the Thai economy after the first stage of the coronavirus pandemic.

 

And they fear that unless government intervention is undertaken things are only going to get worse with the potential for three million people out of work by the end of 2020. 

 

Tourism has been decimated in particular taking a greater than 80% hit.

 

All in all the effect of the pandemic is worse than the devastating "tom yam kung" financial crisis in 1997 that had its roots in the collapse of the economy in Thailand.

 

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Picture: ThaiPBS

 

That crisis saw masses of repossessions and a collapse in the Thai baht. This time round the baht remains strong but unemployment is severe, notes Thaivisa.

 

Thanawan Phonwichai, an advisor to the university of the Thai Chamber of Commerce was making assessments and forecasts as reported by the Thai media yesterday.

 

In a worst prediction yet the Thai economy is expected to contact 9.4% with 2 trillion baht in losses. 

 

Tourism is down 82.3% and is the worst hit major sector. 

 

Only gradual improvement is expected if the new cabinet can introduce further stimulus measures. They need to extend cheap loans to give companies and individuals a lifeline to avoid more closures and more unemployment. 

 

But further closures and job losses seem inevitable over the next 3-6 months, she said. 

 

As Thais tighten their belts expenditure in the luxury goods market will be limited. 

 

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Picture: ThaiPBS

 

If help is not provided to SMEs (small and medium enterprises) she feared that by October another million people could be made redundant and by year's end the figure could be an extra 2 to 3 million people. 

 

This downturn would be most keenly felt in the industrial sector. 

 

Gross Domestic Product (GDP) is expected to plunge 15% in the second quarter making it the worst since records began. This compares to 12% in the second quarter of 1998 following the 1997 financial crisis. 

 

Apart from tourism, sectors of the economy that are facing greater than 70% contractions include hotels, restaurants, fitness, beauty, jewelry and the service industry.

 

Sources: ThaiPBSChannel 7

 

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-- © Copyright Thai Visa News 2020-08-06
 
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9 minutes ago, bkk6060 said:

Record low interest rates, inflation and the Nasdaq is at all time highs.  

Exactly why the economy is due for a massive hit. Mark my words, the stock market will crash soon. Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter of 2020, real GDP decreased 5.0 percent.

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54 minutes ago, Matzzon said:

But the baht is still strong, right?

Other countries' currencies are weak.

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16 minutes ago, bkk6060 said:

Record low interest rates, inflation and the Nasdaq is at all time highs.  

When the Fed and Treasury Department float the credit and stocks markets with literally trillions of dollars...yes the markets will levitate (recall they were down 30% and heading lower) a month or so into the crisis in March/April of this year). Wait and see what happens when the money spigot is turned off.

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1 hour ago, petermik said:

Simple solution devalue the hugely inflated BAHT...:thumbsup:

Maybe consider baht denominated assets and income streams 😉

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