Light In Thailand’s Economy Despite Coronavirus Outbreak
The recent outbreak of the novel coronavirus, or COVID-19 is threatening the global economy outlook. Thailand’s finance ministry has recently cut its 2020 economic growth forecast to 2.8 percent from 3.3 percent projected three months ago, owing to weaker exports due to ongoing US-China trade tensions and fall in tourism numbers due to the spread of the virus.
Despite this gloomy outlook, Kasikorn Research Center (K-Research) predicts that the impact of the virus on Thailand’s GDP will be moderate as the country is not as reliant on China’s economy as other economies like Vietnam or Singapore. The novel coronavirus could lower Thailand’s nominal GDP by 0.09-0.13 percent if the outbreak lasts longer than three months but less than six months, according to K-Research.
In light of this, the government has taken several initiatives and measures to alleviate the impact of the virus, according to Fitch Solutions. This includes plans to introduce tax cuts and subsidies for the tourism sector and supporting domestic consumption and travel by extending the Taste-Shop-Spend programme. Moreover, kick-starting work on the delayed high-speed rail link, which is part of the Eastern Economic Corridor initiative, could spur some construction and investment activity in the region.
Another encouraging sign is the movement of productions out of China to Southeast Asia countries such as Thailand due to the trade war and the virus outbreak. Google and Microsoft are accelerating efforts to shift production of their new devices away from manufacturing plants in China to Vietnam and Thailand. Toyota Boshoku Corporation are also considering moving production of auto seat covers to Japan or Thailand.