COVID 19 Hits Thai Economy Hard – Worse Than 1997 Financial Crisis

Tha Pae Gate

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 the 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 out of the major sectors.

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.

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.

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, jewellery and the service industry.


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