Thai economy shrinks, pandemic to blame

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