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Thai economy shrinks, pandemic to blame

Caitlin Ashworth

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Thai economy shrinks, pandemic to blame | Thaiger
PHOTO: Thailand Public Relations Department

The Thai economy is shrinking. A lot. So much that it’s close to hitting as low as it did in the 1998 financial crisis. Some say the coronavirus pandemic is to blame.

For the second quarter, the Thai economy shrank by 12.2%, the National Economic Social Development Council says. That’s just a few decimal points away from a low in the financial crisis, according to the council’s secretary general Thosaporn Sirisumphand.

“It is the most severe contraction since the second quarter of the 1998 Asian financial crisis, when GDP had sunk by 12.5%.”

The Nation reports the coronavirus pandemic had a huge impact on the drop in GDP in Thailand as well as many countries around the world. They say China and Vietnam are the few that experienced growth.

The Thai economy is expected to shrink by 7.5% for the full year, but that’s if there’s not a second wave of the coronavirus, the Nation says. Sirisumphand says the economy has improved with the recent reopening of businesses.

While a second outbreak is a potential threat to the economy, Thailand’s domestic political protests and the trade war between the United States and China could also impact the Thai economy.

“Should the country face political turmoil, it would worsen the economic downturn.”

Siriumphand warns that many could lose their jobs if the economy does not improve. The Nation says the unemployment rate rose 1.95% in the second quarter with 745,000 people unemployed. Many are looking for jobs. Just earlier this week, thousands of job seekers crowded Bangkok hotel to file an application.

“Should the economy not get better, then 1.76 million workers would be laid off, but if the economy improves, they will be able to keep their jobs.”

SOURCE: Nation Thailand

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8 Comments

8 Comments

  1. Avatar

    rinky stingpiece

    Tuesday, August 18, 2020 at 1:31 pm

    They best start making some trade deals with major economies around the world to export products and import skills, training, capacity building and investment. Scrap the layers of pointless bureaucracy that ultimately constrains the country from growing.

  2. Avatar

    harry1

    Tuesday, August 18, 2020 at 2:33 pm

    what with the strong baht damaging exports,tourist revenue now decimated and the faithful longterm stayer gone,and no insight when this virus will be contained worldwide.the powers that be need to open up its residential market for oversea investor and allow freehold ownership with residency rights.there are 100 of thousand of long termers looking to buy abroad especially in a virus free country.until this becomes a reality thailand can be waiting for years for the return of tourism

    • Avatar

      gabby

      Wednesday, August 19, 2020 at 4:01 am

      I agree with harry1. The strong Thai Baht is definitely damaging exports as well as the tourist industry. It is also jeopardizing foreigner’s real estate investment. Many foreigners have already bought condos in various parts of Thailand. They would love to stay for longer periods at a time and spend their hard earned money in the country. There are an enormous number of projects presently being built nationwide. These condos and luxury real estate projects are aimed at buyers who would like to spend more than just a month or two in Thailand. The visa restriction should be eased for long termers who already own real estate in Thailand and those who are planning to buy in the future. It’s money out the window if the authorities do not pay proper attention to long termers.

  3. Avatar

    Bobby m

    Tuesday, August 18, 2020 at 6:09 pm

    I think (pandemic partly to blame) would be a more accurate statement.

  4. Avatar

    Mike Frenchie

    Tuesday, August 18, 2020 at 10:27 pm

    What about an overreaction of the government closing down a country for a disease non lethal for most people (below 60 and without pre-conditions)? Sweden has got the correct reaction…

  5. Avatar

    gabby

    Wednesday, August 19, 2020 at 3:57 am

    I agree with harry1. The strong Thai Baht is definitely damaging exports as well as the tourist industry. It is also jeopardizing foreigner’s real estate investment. Many foreigners have already bought condos in various parts of Thailand. They would love to stay for longer periods at a time and spend their hard earned money in the country. There are an enormous number of projects presently being built nationwide. These condos and luxury real estate projects are aimed at buyers who would like to spend more than just a month or two in Thailand. The visa restriction should be eased for long termers who already own real estate in Thailand and those who are planning to buy in the future. It’s money out the window if the authorities do not pay proper attention to long termers.

  6. Avatar

    Davidnicholls

    Wednesday, August 19, 2020 at 4:33 pm

    If Thailand does not open by Christmas it will be finished as people will travel to other countries it’s sad but true thai people will suffer not the government

  7. Avatar

    james

    Wednesday, August 19, 2020 at 9:30 pm

    Shrank by 12.2%?

    So no different to most other economies in the world then.

    I see the ex-pats are at it again with their comments sounding more important than they are, I doubt the few hundred thousand of them who are here contribute much to the economy, it is the 30 million tourists per year who spend 5000 baht a day who contribute 17% to the Thai economy, not the ex-pats scraping along on their low pensions and rented condos.

    Once tourism bounces back then the 12.2% loss will be gone.

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Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

Economy

2 emergency decrees provide businesses financial help

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2 emergency decrees provide businesses financial help | Thaiger
PHOTO: 2 Decrees aim for financial relief for struggling businesses

Thailand enacted 2 new emergency decrees today aimed at providing assistance to businesses and reducing default interest rates to help people affected by Covid-19. A deputy government spokeswoman confirmed the needed action was critical to protect and aid entrepreneurs and small and medium-sized enterprises during the time of pandemic-driven economic crisis.

The goal was to combat unfair interest rates on debt many are suffering, and to provide loans to help keep businesses afloat as the end of the Coronavirus is nowhere in sight.

The Emergency Decree on the Provision of Financial Assistance for Entrepreneurs Affected By the Covid-19 Pandemic allocates 250 billion baht in loans for businesses to recover from the devastating economic effects of the global pandemic. 100 billion baht of this is specifically set aside for those businesses in debt to participate in asset warehousing or debt repurchasing plans.

Asset warehousing allows businesses, like hotels, to essentially store their property in the care of a creditor for a fee until the economy recovers enough to take over the property again and start making money with it again. Debt repurchasing is a process for a business to buy back its own debt with better terms or a lower rate with the purchase price considered a payment to the principal debt not the interest, similar to refinancing a home.

The second of the emergency decrees, an amendment to the Civil and Commercial Code, looks to close loopholes caused by ambiguity in the law that allowed predatory creditors to charge unreasonable interest rates.

If someone missed a loan payment, the original law did not set a default rate, so lenders could charge additional interest. Debtors can now base default rate calculations on the unpaid principal in the updated law. The new decree sets a 3% yearly interest rate and lowers the default rate to 5% a year from the originally 7.5%. The Finance Ministry declared interest rates would be revised every 3 years.

SOURCE: Bangkok Post

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Pattaya

Unemployed elephants walk 500 kilometres from Pattaya to Surin

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Unemployed elephants walk 500 kilometres from Pattaya to Surin | Thaiger
PHOTO: Elephants walking down the road because their car is in the shop.

A group of 5 elephants and their owners began the long walk today from Pattaya to Surin after giving up on the return of tourism anytime soon. The 500 kilometre journey has to be done on foot as they couldn’t afford to hire trucks large enough to carry each elephant.

After waiting a year for the Chinese tourists that make up a majority of their customer base to return, the families decided to embark on the long journey with the 5 elephants to their home in the northeastern province of Surin. As they walk they’re protected on both sides by pickup trucks to keep them safe from cars.

5 years ago Napalai Mai-ngam came with her relatives to work in an elephant resort in Tambon Lam Huay Yai of Bang Lamung near Pattaya with their 5 elephants. They told the Bangkok Post that their earned a good living, about 75,000 baht (15,000 per elephant) plus tips from the tourists to ride elephants on nature trails, each month.

But with the borders closed due to the Covid-19 pandemic the tourists from China who usually flocked to elephant activities, were stuck back in China and Napalai’s boss had to cut their pay. Even with vaccinations finally underway, tourists in numbers, enough to sustain activities like elephant camps, may not be back anytime soon. The families finally had to surrender to the reality and start the long walk home.

They avoid the blistering Thai sun by walking early mornings while the weather was still cool, and hope the roadways out of Pattaya would provide snacking opportunities for the elephants to graze. They expect the journey to take about 2 weeks. The families have turned down offers of cash donations for fear that their long walk will be viewed as a publicity stunt.

That said, the families have expressed gratitude to the locals in towns they pass who have donated drinking water, food and fruit to the entourage of people and elephants. If you would like to donate resources you can contact them on phone number 093 335 7062.

SOURCE: Bangkok Post

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Economy

Southern Thai people turn from tourism to gold panning

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Southern Thai people turn from tourism to gold panning | Thaiger
PHOTO: Traditional panning for gold replaces tourism for income in Southern Thailand

Thars gold in dem hills!

With tourism in Thailand struggling due to Covid-19, and an economy needing some help, some people in the southern Thai region of the country have found income in an unusual source: panning for gold. The Sukhirin region close to the Malaysian border is known for gold deposits in the Sai Buri River and surrounding mountains. Villagers who made money before with tourism have now returned to panning for gold using old-fashioned manual techniques their ancestors used, without the aid of any machinery. Well, just an old pan.

Locals had previously made money selling food to passing tourists or acting as a tour guide to take people around the area, where travellers seeking to get away from the crowded and overdeveloped tourist areas that attract the most foreigners find many unique activities. Kayaking was a popular local activity with up to 150 people a day sailing down the rivers that are now filled with locals panning for gold. The prospectors are now making their income from the gold they collect which sells for 1,500 baht per gram. Families that work together can often collect at least one gram a day.

Thai Gold prices have reached record highs over the last 2 years and many Thai people have traditionally used gold and gold jewellery as a form of savings and investment, pawning their gold rings and bracelets in times of financial emergencies. The gold collected from these Southern villages will be used to make jewellery in Bangkok.

The region had invested in expanding into ecotourism but the pandemic put all their construction plans on hold. A cable car was being built to transport people up to the tops of the mountains to beautiful temples. The area’s unique history attracted people to their annual Rocket Festival, typically a north-eastern celebration.

In 1932, France was granted a 25 year mining contract in the jungles. They extracted almost 2000 kg of gold before World War II forced closure. The mining tunnels still exist and sometimes attracted adventurous tourists, but now sit vacant aside from snakes. In the 1960s the Thai government incentivised northerners with 18 rai of land each to move to the region. As a result, the area stands out in the Muslim region with 90% of the population being Buddhist, and most still speaking Isan dialects.

SOURCE: France 24

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