BANGKOK: The new Covid-19 outbreak will wipe 140 billion baht off Thailand’s trade and tourism revenue, TMB Analytics forecast. Trade and tourism account for 22% of Thai gross domestic product (GDP) and 6.9 million jobs.

TMB Analytics said the biggest economic fallout would be felt by the central and eastern red-zone provinces, where trade and tourism accounts for 23% of GDP. It forecast the fresh outbreak, which began in mid-December, would cost these provinces 128 billion baht.

The top three worst impacted provinces would be Bangkok, which would lose 81.42 billion baht, Chonburi (15.46 billion baht) and Phuket (2.79 billion baht).

TMB Analytics suggested the government should issue remedial measures to support business operators including shops, restaurants and entertainment venues.

Meanwhile, the Bank of Thailand (BoT) may cut its benchmark interest rate to a new historic low of 0.25%, Kasikorn Research said.

It also warned that households and businesses remain vulnerable to debt, but insisted that Thailand’s banks were still strong amid the second wave of Covid-19.

Thanyalak Vacharachaisurapol, deputy managing director at Kasikorn Research Centre, expressed concern that household debt in the third quarter last year stood at 86.6% of GDP, and is expected to rise above 91% by the end of this year.

High household debt has hit many countries, following low or falling GDP growth amid the pandemic.

The Thai government has responded by helping debtors facing liquidity problems, while trying to alleviate household debt levels.

The BoT and financial institutions are implementing additional assistance measures, while extending existing measures such as the debt holiday (until mid-2021) and debt restructuring.

As for the BoT’s benchmark policy rate, KBank forecasts it may fall from 0.5% to 0.25% given the highly uncertain situation, but sees a zero-interest rate as unlikely given the BoT is equipped with other tools to ease financial costs for businesses.

— The Nation/ANN