BANGKOK, April 3 (TNA) — Two commercial banks predicts the Thai economy will contract by 5-6.8% because the coronavirus disease 2019 (COVID-19) has severer impacts than expected.
KKP research center of Kiatnakin Bank predicted the gross domestic product would shrink by 6.8%, downwards from its previously anticipated fall of 2.4%, because the impacts of the COVID-19 pandemic were greater and strict disease control measures in countries would stop economic activities longer than earlier expected.
The center pointed out that disease control measures in Thailand including provincial lockdowns, social distancing and a nationwide curfew would affect hotels, restaurants, trade and transport that employed 10.1 million people, or 30% of all employment in the country. The center expected about 5 million people would lose their jobs.
It urged the government to give financial support to public health affairs, relieve the burdens of affected parties, continue to stimulate the economy and issue measures to support financial systems.
Tim Leelahaphan, economist at Standard Chartered Bank, said the Thai GDP would drop by 5%, worse than a 1% decline forecasted earlier, because the COVID-19 pandemic was escalating. Such a situation could prompt the Bank of Thailand to reduce its policy rate gradually to 0%, he said.
He suggested fiscal policies should be implemented to prevent the 0% interest rate; otherwise, he said, baht would depreciate and capitals would flow out of the country. (TNA)
