Covid-19 resurgence, weak labour market, threats to economic recovery – Bank of Thailand

A director at the Bank of Thailand’s economic and policy department says the resurgence in Covid-19, coupled with a fragile labour market, poses a threat to the country’s economic recovery. Chayawadee Chai-Anant says the reintroduction of strict lockdowns in many other countries also poses a risk. She says the full impact will depend on the rate of new infections in the Kingdom and the government’s response to the resurgence.

According to a Bangkok Post report, while Chayawadee does not expect a double-dip recession (a recession, followed by a short period of recovery, followed by another recession), she admits a rise in Covid-19 infections could affect the economy in the first part of the year, particularly with the labour market remaining fragile.

“The labour market is an important driver of Thailand’s economic recovery and our labour market has considerable elasticity.”

Unemployment figures dropped slightly last month, to 2%, having been at 2.1% in October. There were 810,190 people reported as unemployed in October, which decreased to 783,760 last month. While the overall economy showed some signs of improvement in November, the decimated tourism sector is still crippled by the lack of international visitors.

Meanwhile, Amonthep Chawla from CIMB Thai Bank, says a rise in Covid-19 cases in the Kingdom will have an impact on consumer confidence, affecting revenue in the food and services sectors. Although this may not lead to higher unemployment, it could see the introduction of reduced working hours, thereby affecting private consumption and Thailand’s rate of economic growth next year.

SOURCE: Bangkok Post