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“Thailand’s economy will take 2-3 years to recover” – Krungthai

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Across the world the hopes of a quick recovery in countries’ economies evaporate as the effects of either the coronavirus, or the effects of the lockdowns, drag on. Even though Thailand has effectively contained Covid-19 at this stage with zero local transmissions for over 2 months, the economy is now stumbling with many businesses shuttered and no tourists coming into the country.

Krungthai Bank has published a report stating that it would take 2-3 years for economic recovery in Thailand while health and digital business “would have a bright future”. Payong Srivanich, the Krungthai Bank president, quoted from a UN report stating that the Covid-19 pandemic was the worst global crisis since World War II.

In 2021 Covid-19 would cause a “severe contraction” to 60% of the global economy and it would take 2-3 years for economic restoration.

“However, Thailand was in a better position than many countries thanks to its monetary and financial discipline, adaptation and digitalisation in the private sector.”

The report points out that Covid-19 brings a bright future to health business and “accelerated technological development”. The report states that in April there were more than 10 million Prompt Pay transactions a day, doubling last year’s transactions.

The Krungthai Bank Compass Research Centre predicts that the Thai economy will shrink by up to 8.8% for 2020. The downturn would be close to what happened in the Tom Yum Kung economic crisis (below).

The Asian financial crisis was a period of financial crisis that gripped much of east Asia and south east Asia starting in July 1997 and raised fears of a worldwide economic meltdown.

The crisis started in Thailand (known locally as the Tom Yam Kung crisis) on July 2, with the financial collapse of the Thai baht after the Thai government was forced to float the baht due to lack of foreign currency to support its currency peg to the US$.

 

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3 Comments

3 Comments

  1. Toby Andrews

    Sunday, August 2, 2020 at 10:45 am

    And for every week these state restrictions persist, and any week to recovery.

  2. Perceville Smithers

    Sunday, August 2, 2020 at 2:25 pm

    Updates on when the travel restriction on general tourism will be lifted needs to be better communicated. Also, getting testing results back within 72 hrs in all countries is not realistic.

    I’ve talked to several people who’ve been visiting for 15+ yrs but are feeling no longer welcomed.

  3. Simon

    Tuesday, August 4, 2020 at 9:27 pm

    Thailand has focused only on containing the virus – a very focused but narrow approach, allowing its economy to stagnate. It has done so in order to congratulate itself on its handling of the virus and of course in the eyes of the World it has done a good job, thus saving face etc.

    Unfortunately, no one can estimate how long it will take for the economy to recover because no one even knows when the economy will restart in earnest.

    Countries like the UK which has been criticised for its handling of the virus is bringing the virus under control while allowing its economy to continue – a two-pronged approach. Countries will need to learn how to adapt to living with the virus. Trying to eradicate it is a waste of time. But of course, it makes you look good and gives you a well-earned pat on the back.

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