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Thai economy may lose $3.2 billion a month after new virus outbreak


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FILE PHOTO: Construction workers are seen in a building in Bangkok, Thailand March 8, 2017. REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Thailand's economy could lose 100 billion baht ($3.19 billion) a month, mainly in the service sector, a university said on Thursday, as the tourism-reliant nation deals with a third COVID-19 wave and a highly contagious variant.

 

The new outbreak, which has seen over 18,000 cases in just 22 days, might reduce the number of workers by 149,000 a month, the University of the Thai Chamber of Commerce said.

 

The university expects the new wave to be controlled within two or three months like the previous outbreaks, cutting gross domestic product (GDP) by 1.2% to 1.8%, university president Thanavath Phonvichai told a briefing.

 

"If there will be economic stimulus measures, the economy may grow 1.2% to 1.6% this year," Thanavath said, adding the university's current forecast was for 2.8% growth.

 

Household debt levels might rise to 92% of GDP this year as the outbreak has cut income and jobs, he said.

 

The debt hit 89.3% of GDP, the highest since records began, at the end of 2020, when Southeast Asia's second-largest economy suffered its deepest slump in over two decades due to the pandemic.

 

The new spread, which accounts for more than a third of Thailand's cases so far, also comes as the country takes tentative steps to reopen to foreign visitors after a year of tightened border controls.

 

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-- © Copyright Reuters 2021-04-22
 
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Third wave of COVID-19 has cost the Thai economy 200-300 billion baht

By Praphorn Praphornkul

 

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BANGKOK (NNT) - Analysts are encouraging the state to step up remedies for the COVID-19 situation, after assessing that the third wave of infections has cost the economy 200-300 billion baht and could cap growth this year at 1.6 percent.

 

President of the University of the Thai Chamber of Commerce, and head of the Economic and Business Forecasting Center, Thanawat Polwichai, has assessed the third wave of COVID-19 infections is costing the country 100 billion baht a month in economic activity and is cutting demand for labor by about 148,000 people a month, while calling for vaccination efforts to be expedited and rehabilitation of the economy to be accelerated.

 

The economist suggested that the government inject 200-300 billion baht into the financial system to spur activity and to provide aid to businesses, especially SMEs. Proposed courses of action include bolstering SME liquidity, finding revenue sources for them and suspending debt repayments. His center has held off adjusting its economic outlook for the year, at 2.8 percent growth, but has indicated it may have to cut the prediction to 1.6 percent if no action is taken by the state.

 

Up to 60 percent of chambers of commerce across the country have reported an impact from the third wave of infections and called it the worst yet. They explained that, while no lock down has been called, the compound effect of the three waves has severely impacted businesses. Their assessment is that, even if the situation is concluded by June this year, it will take two years for businesses to return to normal and 15 months for provincial economies to normalize, in terms of consumption and investment.

 

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47 minutes ago, webfact said:

and could cap growth this year at 1.6 percent.

So, 6%, 5%, 4%, 3.5%, 3%, 2.8% now 1.6%.

 

Total joke these financial wizards.

 

It will be ZERO at best with no opening, get used to it and plan for it.

 

 

 

 

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GDP size and growth isn't a factor in determining Baht strength, GDP could be 20% lower than today and the Baht would stay exactly where it is.

 

GDP growth of whatever, does it really matter this year, under the circumstances? Don't forget though, when the government spends money to bail out this and that and gives handouts to people, that money counts towards GDP, if they give away enough money, GDP growth could even be 10% this year! 

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5 hours ago, webfact said:

Analysts are encouraging the state to step up remedies for the COVID-19 situation, after assessing that the third wave of infections has cost the economy 200-300 billion baht and could cap growth this year at 1.6 percent.

I wonder if Prayut figured this into the calculations when he decided to open up the whole country during Songkran, even allowing Red Zones to travel.

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16 hours ago, sammieuk1 said:

And inexplicably the Baht will remain unbelievably strong still awash with the fabled foreign currency reserves no doubt🤔

My thoughts exactly.  Easy to worry about things going wrong, but they need to realize that the overpriced Baht is the real 800-pound gorilla in the room.

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We need Thailand's government borrowing debt as a proportion of GDP to go up and the economy to stall ,so that the Thai baht will hopefully go down !! Good for us farangs with pensions and income from overseas !

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4 minutes ago, Jen65 said:

We need Thailand's government borrowing debt as a proportion of GDP to go up and the economy to stall ,so that the Thai baht will hopefully go down !! Good for us farangs with pensions and income from overseas !

Well in the short term that would be nice but invariably a weak baht will cause the cost of imports to go up. It imports much of its oil and gas and gasoline and diesel will rise significantly hurting the already poor 90% even more. Inflation will wreak further havoc to the poor. Of course those with millions won't give a damn as their money is safely stowed elsewhere but in the long term the bahts collapse , or partial collapse will make the poor poorer and no, people won't be streaming back here on holiday either.

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It may and may not but in reality the economy will follow the trend.

Growth might be less than 1% v 3% published by the CBT. I very much doubt the 10% growth in  exports for the year as published by the CBT.

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1 hour ago, RichardColeman said:

So, 6%, 5%, 4%, 3.5%, 3%, 2.8% now 1.6%.

 

Total joke these financial wizards.

 

It will be ZERO at best with no opening, get used to it and plan for it.

 

 

Agreed. whenever I see a picture such as the one heading up this topic, I want to laugh. I just can't take these people seriously. Which seems fine because they evidently take themselves seriously enough for all of us.

 

But is really shouldn't be this way. I struggle to think of any aspect of the country which is well-managed, so it isn't just these talking heads, it seems like it's a national cringe problem.

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Check the export levels before writing off Thailand's fiscal position at year end.

Imports are also down.

I agree that the Covid/Songkran travel policy handling was crazy & am sure

the PM realizes he made a decision from the heart instead of the brain.

The Thonglor BIB again accepted bribes to go blind, as did the border patrols up North.

His staff let him down.

Now we have a moving target so very difficult to predict when there would be a recovery.

The Health Minister's handling of the vaccine procurement  has been nothing short of 

ransom of the country but in fairness to him he is being instructed from  much higher up

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Just now, natway09 said:

Check the export levels before writing off Thailand's fiscal position at year end.

Imports are also down.

I agree that the Covid/Songkran travel policy handling was crazy & am sure

the PM realizes he made a decision from the heart instead of the brain.

The Thonglor BIB again accepted bribes to go blind, as did the border patrols up North.

His staff let him down.

Now we have a moving target so very difficult to predict when there would be a recovery.

The Health Minister's handling of the vaccine procurement  has been nothing short of 

ransom of the country but in fairness to him he is being instructed from  much higher up

Oh come on. Made a decision from the heart instead if the brain? That's how he makes all of his decisions, the man's a numpty, pure and simple.

 

For goodness' sake "His staff let him down". Gimme a break. As for being instructed 'from much higher up'... Friend, you badly need to stop looking for excuses not to blame this guy for what is essentially a master class in balls-ups.

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I have just heard from my Thai family, that in the last day or so there is a large spike in the number of COVID cases.

   Is it from the variants that are now in the country?

Geezer

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