The COVID-19 crisis An unexpected epidemic situation Affecting the world, including Thailand today. How severe is the “Thai economy” this time? Are the symptoms more severe than other crises in the past? And how long will this scar be buried? Follow and read from this analysis.
As soon as the Bank of Thailand (BOT) announced the latest 2020 forecast for the Thai economy of negative 8.1. This is because it is the lowest number on record and is heavier than the Tom Yam Kung crisis. This reflects the severe impact of COVID-19 on the Thai economy in a wide range. And many people still have no answer as to when the epidemic will end.
The root of this crisis is different from the past.
This is often caused by the financial sector or the real estate sector. But this time, the beginning of the epidemic spread around the world. Until there must be strict preventive measures. Impact on most economic activities. Causing a lot of unemployment. If the global economy and the Thai economy are runners competing, COVID-19 is like a rock that makes all runners suddenly stumble and fall. Make wounds all over the place.
The question that follows is How severe is the wound of the Thai economy ?
The symptoms of this wound are much more severe than other crises. In the past or not ?
The first answer was the size of the wound, this time it was considered large and deep, and the big was the widespread effect. From people who are unable to live their daily life normally And businesses in both the service and industrial sectors that are experiencing a severe drop in demand Especially small businesses that were not already strong. The deep part is the severe economic contraction. Especially the tourism and export sectors.
For that question Are the symptoms of the wound more severe than the past?
The answer depends on 1) the Thai economic health before the injury and 2) the economic treatment methods.
1) Czech economic health of Thailand.
The health of Thai runners must be considered before tripping on a rock. Strong And having vaccinated against disease makes the chance of complications are less. Thailand has strength in both the financial institution sector. That Thai banks have experienced the Tom Yum Kung crisis Considering that the capital funds on risk-weighted assets have continued to increase and are above the threshold set by the BOT.
It is possible to issue measures to aid debtors and to replenish liquidity for businesses. Providing credit to businesses during the rehabilitation period Without having to worry that the bad debt problem will escalate into a financial crisis .
The business sector is also strong.
Have less dependence on foreign debt. And most of them have hedging against foreign exchange risk and the government sector that maintains a constant fiscal discipline. Public debt level is still below the international threshold, leaving space to support. Through the issuance of stimulus measures during deep wounds .
While the stability of foreign countries Of Thailand in a strong category . Considering the high current account surplus for many years. The high level of international reserves allows the BOT to cut policy interest in the face of high volatility of international capital flows. Or in other words, Thailand has high immunity in almost all aspects.
2) Economic wound healing method For Thai public health It must be considered successful as well.
But it has a serious side effect on the Thai economy. This is because many parts of the economy have been disrupted. Causing a deep wound It is expected that the Thai economy will contract at its deepest in the second quarter, where Thailand has been using strong drugs to sustain its economy through the coordination of both fiscal and monetary policy.
From past experiences Make the policy operator or surgeon know that Extending the patient pulse early in the crisis through monetary and fiscal measures, despite its enormous value. But it’s better than letting the patient get so severe that he needs to pump his heart to recover his pulse. Which costs much higher in the long run .