Thailand
Thailand: 10% contraction seen from renewed outbreak
The economy could contract by as much as 10% this year in a worst-case scenario in which a second coronavirus outbreak occurs after the government lifts lockdown measures, says a financial expert.
Supavud Saicheua, adviser to Kiatnakin Phatra Financial Group, expects the global economy to shrink by 6% in 2020 if there is a second wave of Covid-19 and continue to deteriorate further in 2021.
“If the situation continues into next year, global GDP growth will continue to decline instead of seeing 5% growth,” Mr Supavud said. “For Thailand, economic losses remain open-ended.”
During the 1918 Spanish flu pandemic, the virus subsided during the summer and saw a second wave in the autumn, leading global health authorities to fear a similar resurgence of the current pandemic.
Thailand could be vulnerable to a second wave because the beginning of the rainy season in June often leads to higher instances of the flu.
The World Bank recently predicted that Thailand’s GDP would shrink 5% this year due to the spread of Covid-19, drought, stagnant wage growth, rising unemployment and growing poverty.
Mr Supavud said easing some lockdown measures is essential to rebuilding the economy after the government announced it would continue the lockdown and curfew for another month.
“Businesses need to renew operations to boost the domestic economic recovery,” he said. “If the government uses lockdown measures for too long, it will only exacerbate the financial problems of businesses and individuals.”
The group estimates that as a result of the one-month lockdown measure set to expire tomorrow, exports will decline by 5%, tourism and services by 30-40%, the automotive sector by 20% and the real estate sector by 20-30%.
“If the government uses the lockdown more than one month it will have a stronger effect on the business and domestic economy,” Mr Supavud said.
For Thailand, the challenge is how to unwind the lockdown measure and handle the number of infections under the capacity of the country’s public health system, he said.
Security in public health and the ability to deal with new viruses are other key issues of economic policy, he said, since Covid-19 could recur every year.
Thailand’s ageing demography is also compelling the government to be prepared in terms of public health sustainability.
GLOBAL HEALTH PRESTIGE?
Boon Vanasin, owner and chairman of Thonburi Healthcare Group, said the government has implemented strong measures to cope with the outbreak and lift Thailand’s health security image globally.
“The government did a great job coping with the Covid-19 outbreak and controlling the spread of the virus,” he said.
Thailand ranked sixth among 195 countries providing the strongest health security, according to research by John Hopkins University published last year, before the pandemic.
“Thailand is the only developing country ranked among the global top 10, as well the first among Asian countries,” Dr Boon said.
But Thailand cannot drop its guard with the Covid-19 situation, he said, because there could still be a second wave after the government phases out the lockdown.
Source: https://www.bangkokpost.com/business/1909536/10-contraction-seen-from-renewed-outbreak