UKABC Digital Conversation on Thailand
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Wed, 20 May 2020
UKABC Political and Economic Update on Thailand
UKABC partners heard from Brian Davidson, British Ambassador to Thailand and Richard Porter, DIT Country Director who provided a tour-de-force of the coronavirus impact on the second-largest economy in Southeast Asia in a conversation that was led by UKABC Chair, Baroness Neville-Rolfe DBE CMG.
The IMF has predicted that Thailand’s economy will contract 6.7% in 2020, making it the worst performer in Southeast Asia. A nation of 69 million people, its economy was already showing signs of slowing before the pandemic growing just 2.4% in 2019. The government has responded with robust economic packages amounting to 15% of GDP, among the highest in East Asia and the Pacific according to the World Bank.
On 25 March, Thailand declared a state of emergency unveiling special powers and tougher restrictions on normal life that included social distancing, travel, a night curfew and a ban on foreigners entering the country. The decree, currently set to end on 31 May is expected to be extended as the country continues to battle the coronavirus.
Thailand was the first country to report a COVID-19 case outside of China and has recorded 3,034 cases with 56 deaths. The effectiveness of the government’s measures and its respected health care system have flattened the curve and allowed the government to begin opening up the economy in stages.
The economy has been badly hit by the crisis, compounded by the worst drought in 40 years. Over 7 million jobs, of the country’s 38 million workforce, are believed to have been lost already. As a trading nation, the weakened global demand and disrupted supply chains have affected its manufacturing and agricultural sectors. Travel and tourism, worth 20% of GDP, has come to a halt.
Fortunately, Thailand still has room for fiscal manuveuring. The current public debt to GDP ratio is at 41.28%. During the financial crisis of the late 1990s it rose to 59.22%. Public debt must not exceed 60% by law. The government has provided a fiscal package worth £10.2 billion consisting of loans, debt payment extensions, tax benefits and cash support in particular for those in the informal economy. Despite the many challenges, the IMF are expecting Thailand to bounce back to 6.1% growth next year.
The session saw questions on tourism, the green economy, the UK-Thailand Joint Trade Review and politics. The Digital Conversation on Thailand is part of a UKABC series for its partners and guests. Senior executives from Arup, Astra Zeneca, BP, Energy Industry Council, GSK, HSBC, JCB, KPMG, Matheson & Co, Michael Page, Pearson, Prudential, Shell, Wood among others took part in the discussion.