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IMF sees Thailand’s growth down 6.7 percent in 2020

The impact of the coronavirus on the Asia Pacific region will be severe and unprecedented says IMF, and Thailand could stand as the worst performer with a 6.7% GDP drop.

Olivier Languepin

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Covid-19 crisis could be worse than the Global Financial Crisis, and Asia is not immune, says the IMF. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will—across the board—be severe and unprecedented.

Unlike the US and other major economies, emerging and developing Asia is likely to be the only region with a positive growth rate in 2020, averaging at 1 per cent.

But according to IMF latest projection, Thailand could stand as the worst performer among its Asean peers with a staggering drop of 6.7 % of its GDP. Singapore would be the second worst performer with a -3.5% GDP forecast for 2020.

Shutdowns from the pandemic could trigger a tsunami of job losses in Thailand especially for employees who don’t have a regular salary, low-paid workers and people without a written contract.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) says that as much as 7 million workers could be out of a job by June because of shutdowns from the pandemic.

Vietnam has emerged as the Asean’s best performer in the report at 2.7% growth, followed by Myanmar at 1.8% growth.

Growth in Asia is expected to stall at zero percent in 2020. This is the worst growth performance in almost 60 years, including during the Global Financial Crisis (4.7 percent) and the Asian Financial Crisis (1.3 percent). That said, Asia still looks to fare better than other regions in terms of activity.

“World Economic Outlook: The Great Lockdown” IMF report

The Bank of Thailand also trimmed its growth outlook last month to a 5.3% contraction and also predicted a contraction in every quarter, with the deepest from April to June.

To mitigate the negative economic impact on employers and employees in the sectors most affected by the outbreak of COVID-19, the Thai government has already approved a series of financial and fiscal relief measures.

Strong growth predicted for 2021

According to the IMF, prospects for 2021, while highly uncertain, are for strong growth, and Thailand’s economy is projected for a strong rebound at 6.1% in 2021.

If containment measures work, and with substantial policy stimulus to reduce “scarring,” growth in Asia is expected to rebound strongly—more so than during the Global Financial Crisis.

Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains, the IMF also projects global growth in 2021 to rebound to 5.8 percent.

Bangkok Correspondent for Siam News Network. Editor at Thailand Business News

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50:50 campaign may not get immediate extension

National News Bureau of Thailand

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BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.

The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.

Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.

The campaign has already been extended once, with the current end date set for 31st March.

The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.

The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.

Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.

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Customs Department Considers Measures to Help SMEs

National News Bureau of Thailand

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BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

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