Economics

Thailand’s outbreak of the Omicron coronavirus variant could have a bigger impact than expected on an economic recovery, according to the Bank of Thailand latest last policy meeting.

According to the Ministry of Public Health, the country is entering a new wave of COVID-19 infections, following the long New Year holidays, with over 2,000 cases of the Omicron variant of coronavirus detected in Thailand to date

Thus the Omicron outbreak could have more widespread, severe, and prolonged effects than the baseline projection, depending on the severity of the situation and the strictness of containment measures.

Looking ahead, global financial markets would remain highly volatile according to Bank of Thailand given:

(1) the risk that central banks could adopt a faster pace of monetary policy normalization to curb high inflation,

(2) the spread of Omicron that could hamper the global economic recovery

(3) the …

Currently, key digital organizations involved in the economy are joining forces to push the Thai gaming industry, so as to attain the level of a regional hub.

In past decades, Thailand has relied on traditional sectors like agriculture, vehicle building and exports, textiles and garments to drive the engines of development. Though Thailand has successfully diversified its economy base into tourism, health care, and other services, the country appears to be in the midst of a prolonged middle-income malaise.

Recently, the government has stepped up its activities by launching a national master plan to move into the higher-value segment of economic activity generating larger incoming revenue for all parties. Then, the digital industry was chosen as one of the new S-curve industries expected to propel a new round of growth.

The Digital Economy Promotion Agency (DEPA)

The Digital Economy Promotion Agency (DEPA) was established in 2017. Among…

Thailand’s State Monetary and Fiscal Policy Committee has decided to raise the ceiling of the public debt-to-GDP ratio from 60% to 70%, which will allow further public sector borrowing to rehabilitate the economy battered by COVID-19.

Finance Minister Arkhom Termpittayapaisith said the decision is intended to provide the government with more fiscal manoeuvrability should the need arise for the government to borrow more money to carry out medium-term financial policies.

He said the ministry will propose the new limit at Tuesday’s Cabinet meeting and assured that the government still has the ability to repay debts. The government has, so far, borrowed 1.5 trillion baht to fund COVID-19 relief and stimulus programs, 500 billion baht of which was approved this year.

Mr. Arkhom said the raising of the ceiling is in line with Section 50 of the 2018 State Fiscal and Financial Discipline Act, which authorizes the committee to revise the ratio every…

The World Bank’s updated Groundswell report released today finds that climate change, an increasingly potent driver of migration, could force 216 million people across six world regions to move within their countries by 2050.

Hotspots of internal climate migration could emerge as early as 2030 and continue to spread and intensify by 2050.

The report also finds that immediate and concerted action to reduce global emissions, and support green, inclusive, and resilient development, could reduce the scale of climate migration by as much as 80 percent.

Climate change is a powerful driver of internal migration because of its impacts on people’s livelihoods and loss of livability in highly exposed locations.

By 2050, Sub-Saharan Africa could see as many as 86 million internal climate migrants; East Asia and the Pacific, 49 million; South Asia, 40 million; North Africa, 19 million; Latin America, 17 million; and Eastern Europe and Cent…

Thailand relaxed more virus related social curbs on September 1st, in dozens of cities including Bangkok, in a move that may indicate that the country’s economy, hit hard by COVID-19 will soon revive, lead by the export sector and sound financial fundamentals.

During the past couple weeks, new infection cases have been down from roughly 20,000 daily cases to 17,000 -19,000. Moreover, the number of daily discharges is exceeding infections, which has led to the conclusion that the situation is improving.

Therefore, the Center for the COVID-19 Situation’s Administration decided at the end of August to lift some lockdown measures in 29 provinces designated “Maximum and Strict Controlled Areas” or dark-red zone provinces from September 1st onward. Restaurants, and Malls have reopened under strict hygienic measures.

Flights between provinces have resumed, while night entertainment venues, schools and other businesses remain closed.

The …

A resurgence of coronavirus infections in Thailand will hamper the country’s economic recovery and raise asset risks for banks in the country.

Yet government measures to support borrowers will limit the deterioration of banks’ asset quality, and banks have sufficient buffers to absorb expected credit losses.

Thailand’s economic recovery will lag that of its ASEAN peers amid a resurgence of coronavirus infections, and this will result in increases in nonperforming loans (NPLs).

Slow economic recovery in Thailand will weigh on asset quality for banks

We project that Thailand’s GDP will grow at the slowest pace among large ASEAN economies in 2021 as the tourism sector continues to suffer from the pandemic amid low vaccination rates.

Loans to small and medium enterprises (SMEs), many of which are tied to tourism, will drive growth in nonperforming loans (NPLs).

Thai banks will maintain adequate sol…

In the first six months of 2021, Thailand’s investment applications increased 14% from the year earlier period in terms of the number of projects, and 158% in combined value, led by increasing foreign direct investment (FDI) applications, sustained growth in target industries including the electronics and medical sectors, as well as in power generation, the Thailand Board of Investment (BOI) said.

From January to June, local and foreign investors filed a total of 801 investment applications representing a combined value of 386.2 billion baht (USD12 billion), compared to 704 projects worth 149.8 billion baht in the year earlier period.

“We feel encouraged by the fact that so many foreign investors, including many new ones chose to invest in Thailand at a time when the global investment environment remains challenging due to the continued impact of the Covid-19 pandemic.”

BOI Secretary General Duangjai Asawachintachit.

“That demonstrates inve…

The Thai baht has been hit by a sharp decline in tourism numbers due to the COVID pandemic, making the country’s currency the worst-hit in the region this year, according to Mizuho Bank.

In a note on July 23, the Japanese bank pointed to “uncharacteristic under-performance of the Thai Baht, rendering it the worst performer to date in 2021”.

Thai baht was the top performer in Asia before the pandemic. In 2019, the country was concerned about the strengthening Thai baht, which was buoyed by its large trade surplus. A stronger currency makes Thailand’s exports more expensive, causing them to be less attractive in global markets.

According to Refinitiv Eikon data, the Thai baht has steadily plunged more than 10% against the U.S. dollar year-to-date in 2021. This makes it the weakest-performing currency this year compared to other major Asia Pacific currencies.

Against the greenback, the Japanese yen is nearly 7% lower, the Malaysian r…

The Delta variant has ripped through Southeast Asia in recent weeks, undoing many countries’ progress against the Covid-19 pandemic. Indonesia has been hit especially hard.

The spiraling crisis in Indonesia—and worsening situations in Cambodia, Myanmar, Thailand, and Vietnam, which are all experiencing their highest rate of case growth since the start of the pandemic—is a sad reminder that even as vaccines are rolled out in the United States and Europe, the Covid-19 pandemic has not abated elsewhere.

Already arguably the most impacted country in the region prior to the current wave, the rate of new cases in Indonesia has spiked to its worst level since the pandemic began, more than quadrupling in less than a month. But the devastation has gone beyond official case counts.

One in four people who take a Covid-19 test in Indonesia come back positive, and the percentage of deaths per positive case increased to 2.6 percent this week, the highes…