“The Bank of Thailand predicts that its gross domestic product will shrink by more than 8% this year.”

While Thailand appears to have been successful in suppressing the Covid-19 virus, a report in The Bangkok Post today says the outlook for the country’s economy is far from favourable, calling it the worst in Asia.

The Bank of Thailand predictions are the bleakest across Asian countries’ economies. Such a drop would be even worse than the one experienced during the Asian financial crisis of 1997-1998. Kiatipong Ariyapruchya, a senior economist for Thailand at the World Bank, says much of it can be attributed to the plunge in international tourism since the country shut its borders in the early weeks of the Covid crisis.

“Thailand has large exposure as a tourism hub, close to 15% of GDP, and it also has a large exposure of the export-oriented sector. Hence the large shock to GDP.”

Meanwhile, Bloomberg is predicting a contraction of 6% for Thailand’s economy, the worst in south-east Asia, with experts expecting it to have a weak recovery of about 4% in 2021. Measures put in place to suppress the spread of the Covid-19 virus. are being seen as a major factor in the economic downturn. The forced shut down of businesses, introduction of a nighttime curfew and state of emergency have had a devastating knock-down effect at a time when investment and consumption were already on a downward trajectory since last year.

With the exception of a limitation on international flights, most restrictions have now been lifted, along with the government introducing various stimulus packages to boost domestic tourism and the overall economy. However, no amount of domestic travel can make up for the devastating loss to the country’s tourism sector, which accounted for a fifth of the overall economy last year.

With airports still closed to almost all international arrivals, foreign tourism is expected to plummet to one-fifth of last year’s figures, at just 8 million. The Thai government is still mulling the introduction of travel bubbles with countries it deems safe from Covid-19, but it’s slow going, with the PM expressing concern over the risk of reintroducing the virus through arrivals from abroad.

Analysts are also saying they don’t foresee a rush of investment any time soon, given the bleak predictions facing the country. Exports appear to be recovering, however, having taken a brief hit during the first two months of the year. The rise in the price of gold is providing a much-needed boost, but exports overall are still feeling the effects of a decrease in demand, in addition to disruptions to the global supply chain.

The strong baht remains an ongoing factor, with the US dollar losing nearly 6% against the baht over the last 3 months, despite multiple interest rate cuts by the Bank of Thailand to try and quell the enthusiasm for the Thai currency. The Central Bank has previously spoken about the negative effect the Thai baht is having on exports and the overall economy, warning that they will take steps to restrain the currency’s climb if necessary.

SOURCE: Bangkok Post

Thai nationals, who are 18 years or older, can start registering for the domestic tourism stimulus package on July 15. The government’s “Rao Tiew Dauy Kan” (We Travel Together) scheme entitles 5 million Thais to discounts on hotels and eating out, while 2 million can get rebates on flight tickets. A report in the Nation Thailand says the arrangement will be in place until October 31.

The Thai government is aiming to kick-start a ‘safe’ domestic tourism whilst slowly prising open its borders to foreigners, and the risk of new infections.

Interested travellers must register through the official website, using the “Pao Tung (Wallet)” app. Discounts and rebates will be available until the allocated quota is used up. Hotel discounts will be for one room over five nights and can be spread over different hotels. If a guest wants to book five rooms in any one hotel, they will only receive a discount for one night. It’s understood the cost of a room will be reduced by 40% or a maximum of 3,000 baht.

Travellers can register between 6 am and 9 pm and will receive a confirmation via SMS. Once the text is received, hotel accommodation must be booked through officially-sanctioned channels and online travel agencies in order to qualify for a discount. Confirmed bookings will then appear in the “Pao Tung” app, along with details of the non-refundable payment that needs to be made through the app.

On arrival at their hotel, travellers will again need to use the app to check-in and use the 600 baht electronic voucher, which will appear in the app. With this, they can receive discounts at participating restaurants and attractions. A 600 baht credit will be added to the app for every night they stay at the hotel, with vouchers expiring at 11.59 pm on the day of departure. Vouchers can be used in any province in the country, with the exception of a person’s home province (determined by their house registration book).

Those taking domestic flights can register for a 40% rebate on the cost of their ticket, up to 1,000 baht. The full cost must first be paid upfront, with the refund later credited back to their “Pao Tung” wallet.

SOURCE: Nation Thailand

US Ambassador to Thailand Michael George DeSombre, who raised eyebrows in May when he described the US as “a better friend than China,” has praised the kingdom’s “great investment potential”, highlighting the expansion of current projects and further support for industry as ways to promote further cooperation. Deputy PM Somkid Jatusripitak welcomed the ambassador to the open discussion amongst key trade officials.

The US Ambassador chose not to wear a facemark during the visit.

The DPM and the ambassador discussed cooperation between the 2 nations, to help strengthen the economies of both countries and promote more US investment in Thailand. The ambassador says Thailand has huge potential and suitability for US companies to invest, especially as part of the supply chain of the South East Asia region.

Somkid says DeSombre is enthusiastic about the development of mutual economic relations, revealing that the ambassador proposed ideas on what industries should receive more support from both sides.

The ambassador expressed confidence that Thailand will become a technological hub in the region, with immense growth potential in the manufacturing and service sectors, as well as stock exchanges that could connect to Hong Kong and Shenzhen.

“Thailand provides excellent medical services, an area which could be expanded to reach more clients and patients…. related agencies are ready to develop mutual exchange packages through the Board of Investment, to promote competitiveness and attract investment.”

The DPM said Thailand doesn’t need standalone investment from individual companies, but rather demands investment packages, which the ambassador says he’ll be proposing soon.

Somkid also stressed that he’s still working on the country’s domestic and international economic affairs, while declining to comment regarding the recent political developments in ruliing Palang Pracharath Party.

Thailand’s economic ministers will meet on Friday to discuss 2 main economic packages.

SOURCE: NNT