InfoQuest, (May 13, 2020) -- In her speech entitled "The Economic Impact of COVID-19", Ms. Kirida Bhaopichitr, director for international research and advisory at the Thailand Development Research Institute(TDRI) said the outbreak has reduced the income of Thais, leading to a decrease in consumption. And the country's lockdown measures are costing the economy 65 billion baht a month, or 0.40 percent of the monthly GDP. Therefore, she believed that Thailand should gradually lift the lockdown measures to drive the continued economic development.
The outbreak has affected a number of industries, including tourism-related hotels and malls that employ more than 1 million people, the automobile production industry which has a chain effect on the small-scale production line, and the property development sector where the purchasing power of domestic consumers and Chinese buyers is losing, which has had an impact on construction contractors.
In addition, the agricultural sector, with a workforce of more than 10 million, has been affected by drought, resulting in relatively low yields. As a result, farmers planting sugar cane, rubber and so on have suffered. Then came the COVID-19 outbreak, which led to further plunges in agricultural prices.
Ms. Kirida said Thailand's next phase of economic stimulus should include focusing on making investment on collective interests and laying the foundation across the country for Thais to adapt to the new normal of living and working, such as a 5G network infrastructure that will help improve work efficiency. And it can be seen that E-commerce, E-service and other online services businesses have benefited from the outbreak.
She suggested that it was time for the government to speed up its marketing efforts to attract foreign investors and companies from foreign countries to invest in Thailand. As most investors and businesses have shifted their focus from low labor costs to more diversification of production risk, Chinese enterprises and enterprises investing in China and other countries begin to diversify their investment to different destinations. Thailand is also one of the target countries for diversification, and its Eastern Economic Corridor (EEC) can accommodate the investment.
Ms. Kirida revealed large infrastructure projects that the government may put on hold include the high-speed rail network linking three airports and U-Tapao International Airport. It will still take a long time for Thailand's tourism industry to return to normal, which is expected to be around 2022-2023, making it less necessary to prop up tourism now than it was a while ago.
As for the policy interest rate, it is still necessary to keep tracking and monitoring the specific development direction of the outbreak. If it doesn't get worse or stops spreading, the policy interest rate should remain at the current level, but further cuts are necessary if the situation worsens.
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