Thai economy won’t need a bailout from the IMF

The Thai economy won’t need a bailout from the International Monetary Fund, although the GDP growth for 2020 may end up being the lowest in the region. The Governor of the Bank of Thailand, Veerathai Santipraphob says the Thai economy is “strong enough”.

Speaking at a seminar entitled “Post-Covid Economic Direction”, Veerathai noted that, although Thailand has managed to control the spread of Covid-19, its economic growth rate for the whole year may end up being the lowest in south east Asia, because of its dependence on exports and tourism. Both have been battered by the impact of the pandemic.

“The Thai economy had bottomed out in the second quarter, after which it will make a gradual “V” shaped recovery, back to pre-Covid-19 levels, at the end of next year.”

Veerathai says that the Thai economy is still regarded as strong and the country will be able to manage the risk of economic recession better than it did in 1997. He cited evidence of the country’s current account surplus, the very high level of international reserves and low level of foreign debt (all which have helped maintain the strength of the Thai baht).

But he admits that the slow pace of recovery is affecting many sectors of the Thai economy, including new college graduates who will be battling a large level of unemployment for many years. He said Thailand could turn the crisis into an opportunity to restructure its economy by strengthening rural communities.

He told the Seminar that the Bank is going to formally ask the cabinet to extend the current executive decree, (which was extend last month to the end of July), to authorise the BoT to extend 500 billion baht in soft loans to small and medium-sized enterprises until the end of 2021.

SOURCE: Thai PBS World