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Thailand: BoT vows study of consumption habits
The Bank of Thailand pledges to keep a close watch on the fresh wave of Covid-19 infections and, in particular, the government’s measures in containing the infections as well as people’s consumption behaviour.
Mathee Supapongse, the central bank’s deputy governor for monetary stability, said at an analyst meeting on Friday that it remains too early to assess the impact of the new round of infections.
He said the central bank needs to monitor the situation, specifically the stringency of the government’s additional measures.
The bank also needs to watch people’s behaviour during the third wave of infections, said Mr Mathee.
“Even though the government has allowed cross-provincial travel, Thais should be wary against infections. People’s travel confidence and their overall spending behaviour, especially during the Songkran holiday, need to be monitored,” he said.
Mr Mathee said domestic tourism sentiment during Songkran is likely to be downbeat because of the fresh outbreak, though the central bank needs actual data before making any economic revisions.
The central bank forecast a Thai economic outlook with three scenarios.
For the baseline, the economy would grow by 3% this year if 3 million foreign travellers visit Thailand, while GDP would contract 0.5% if there are only 100,000 international visitors in 2021.
The latter scenario assumes a third wave of infections taking place in the second half of this year, with a delay in vaccine disbursement, vaccinations, the country’s reopening, a ban on international travel, and virus mutations.
In the worst-case scenario, the Bank of Thailand estimates the economy would contract by as much as 1.7%, with foreign arrivals below 100,000 and more virus mutations.
This scenario assumes virus mutations become serious while existing vaccines are ineffective, requiring new vaccines. In this case, new vaccines are expected to be available in 2022, delaying the country’s reopening plan until the second half of next year.
In a separate development, Chayawadee Chai-Anantamongkol, the central bank’s senior director for the economic and policy department, said Thailand’s GDP in the first quarter this year is expected to contract both on a year-on-year and a quarter-on-quarter basis. The contraction is partly caused by the high-base effect as Covid-19 did not affect the first quarter last year.
Regarding the country’s economic outlook in the second quarter this year, Ms Chayawadee said it requires further monitoring as actual data regarding the third wave is not yet available.
At the same time, the bank continues to watch the results of existing fiscal and monetary measures.
“Given the downside risk amid uncertainties, including possible new virus waves, the government’s myriad economic stimulus packages and recovering exports should support a Thai economic recovery, albeit unevenly,” she said.
Source: https://www.bangkokpost.com/business/2097859/bot-vows-study-of-consumption-habits