Readers survey has some good news for the government as problems grow for the Phuket Sandbox with a ‘crisis’ now on the island according to the Governor of Phuket Narong Woonsiew as COVID-19 infections are rising. Economists are plotting the course of Thailand’s GDP as the rest of the country eases COVID-19 restrictions and plans a wider reopening to foreign tourism due in October. In the meantime, the Thai baht has gained ground against the US dollar by 3.6% since August 10th, just days before the peak of the last virus wave.
The Thai government is setting out its stall to avoid another year of economic contraction with relaxed public health measures from the 1st of September and plans for a controlled reopening of the kingdom to foreign tourism in October. Some analysts believe it could lead to the kingdom’s economy growing marginally in the order of 0.7% in 2021 supported primarily by export growth and over 500,000 foreign tourists in the last three months of the year under wider entry criteria from October 1st. An ongoing Thai Examiner survey of readers outside Thailand in recent days has shown 90% are interested in visiting Thailand again with 13.3% saying they would visit under the government’s demanding Certificate of Entry programme, a result which may be encouraging news for the kingdom’s limited ambitions but shows the highly retardive effect of the controlled entry process.
The Bank of Thailand issued a wary assessment on the future outlook for the economy on Tuesday even as the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) reassessed its earlier bleak assessment, issued in August at the height of the COVID-19 Delta wave of the virus, that the kingdom’s economy could contract by as much as 1.5% in 2021.
It comes as COVID-19 restrictions are being eased in Bangkok and adjacent provinces which account for 80% of GDP as the government moves to drive economic recovery in the last quarter of 2021 on the basis that the third wave of COVID-19 peaked in mid-August and armed with newly signed contracts for more vaccine doses from key manufacturers.
Baht is gaining against the US dollar since August 10th, it’s value has appreciated by 3.6% in weeks
This has been accompanied by an upwards tick in the Thai baht which has gained 3.6% against the dollar since the 10th August, just a few days before the peak of the current wave between the 13th and 16th August, rising from a value of ฿33.47 to the US dollar to just ฿32.20 on Tuesday.
This will prompt concern that speculation on the baht may have resumed in anticipation of a tourist-led recovery even though in July, the kingdom recorded a monthly current account deficit of $700 million following a $1.3 billion shortfall for June.
The new Joint Standing Committee on Commerce, Industry and Banking (JSCCIB)’s prediction is that the economy will grow marginally in 2021, a mirror opposite of its earlier prediction suggesting up to 1.5% contraction was likely in August.
Economy projection moves from projected contraction to marginal growth on the back of predicted higher export growth
The business body based this new figure on the kingdom now achieving export growth of between 12% and 14% this year despite earlier fears that it would be capped at only 7% as factories in July and August reported disruptions due to the COVID-19 virus and supply chain issues.
The economic and business monitoring group also expressed more confidence in the government’s stalled vaccine programme.
It believes now that this will be fully ramped up as the country approaches the fourth quarter of the year.
Vaccines finally coming but a 25% vaccination rate in October appears likely with 9.5% currently inoculated
A government spokesman on Sunday suggested that with 140 million doses to be delivered between now and the end of 2021, it would be able to achieve the administration of 600,000 doses a day from October.
Reappraisal of growth prospects as curbs are eased and progress on vaccine procurement reported
They are also relieved that the peak of the COVID-19 virus wave appears to have passed.
‘Last month we didn’t get the picture and had no confidence in vaccine procurement which could lead to longer lockdown measures,’ JSCCIB boss Mr Payong Srivanich told a press conference. ‘But today we believe in the government’s figures and that infection numbers have peaked.’
This newfound confidence is not universal, however.
Caution advised by senior Bank of Thailand director
Chayawadee Chai-Anant, Economic and Policy Department senior director of the Bank of Thailand, in her assessment on Tuesday, noted that exports for July, while they were up 21.7% on last year, were down by 0.8% on June’s performance.
This was the first time this had happened since the end of 2020 when the export recovery began.
On September 29th, the Monetary Policy Committee of the central bank will meet to discuss whether to lower the country’s historic 0.5% baseline rate with 3 votes on the seven-member panel in August favouring a reduction of 25 basis points to a new low of 0.25%.
The senior bank official suggested that more information will be available at that point, to more accurately ascertain the outlook heading into Quarter Four.
Easing of economic restrictions will help but wider economic recovery based on foreign tourism reopening cannot be assumed at this point
The easing of COVID-19 restrictions will certainly help the domestic economy which has suffered in July and August because of the lockdown ushered in from the end of June and which saw private consumption fall by 5.3% and private investment off by 3.8% in July.
The government is also banking on resurrecting the almost wiped out foreign tourism industry which is only predicted to achieve 150,000 visitors this year.
It is understood that the Tourism Authority of Thailand and government agencies are targeting up to 500,000 visitors by the end of the year under a widening of quarantine free schemes for fully vaccinated global travellers but still using a controlled entry process.
The planned reopening from October 1st is an extension of the Phuket Sandox dispensation to other tourist hotspots and provinces under local plans drawn up by tourism promotion agencies in Pattaya, Chiang Mai, Hua Hin and Bangkok across 5 more provinces.
Tourism minister confirms reopening schedule in parliament during government no-confidence debate
The country will see a wider reopening along those lines by the middle of October which will be extended to twenty one more provinces from October 15th according to Minister of Tourism and Sports Phiphat Ratchakitprakarn speaking on Tuesday in parliament during a no-confidence debate on the government.
Minister Phiphat made it quite clear that Thailand will still be operating in a ‘new normal’ environment as it seeks to attract and welcome its long lost foreign tourists back to the country.
This includes the tortuous and extremely unpopular Certificate of Entry process operated by the Thai Ministry of Foreign Affairs.
Poll of readers shows strong interest in returning to Thailand and a minority who would do so under demanding emergency entry procedures
A Thai Examiner opinion poll conducted over the weekend with 580 respondents showed that 90% of our readers outside Thailand were planning a trip to the kingdom within the next 12 months but only 13.33% indicated that they would travel under the current Certificate of Entry regime which will remain in force under the government’s emergency provisions to deal with COVID-19 as well as the state quarantine scheme.
There is good news and bad news here for the government in that interest in holidaying in Thailand remains high and while a huge majority will not visit under the current regime, 13.33% is a significant minority which could translate into more visitors if globals tourism resumes its momentum having been off by 88% in the first six months of the year according to travel industry sources and the International Air Transport Association (IATA).
Thai Examiner survey on visiting Thailand with the Certificate of Entry process in place – (Click here)
October reopening of foreign tourism to Thailand could be another false dawn with the cumbersome entry regime
Based on the numbers of regular tourists to Thailand from western countries in 2019 in the High Season, it may well be enough to see the kingdom achieve something like the revised Tourism Authority of Thailand (TAT)’s objectives by the year’s end.
Fears for the pioneering Phuket Sandbox scheme as COVID-19 outbreak on the holiday island grows, Governor confirm a ‘crisis situation’ at the moment
However, there are growing fears about the pioneering Phuket Sandbox scheme with a rising COVID-19 outbreak on the holiday island linked to Phuket’s fishing industry and its migrant labour workforce within factories servicing the sector.
On Wednesday, the island reported 258 new infections, another daily record prompting Governor Narong Woonsiew to admit that the current outbreak on the island was a ‘crisis situation’.
Rising infections, bad press and burdensome rules are still real threats to the slowing Phuket Sandbox
‘That the number of infections is more than 200 a day is a crisis situation,’ he said on Wednesday. ‘We need to manage the situation better in the province.’
Migrant workers connected with Phuket’s fishing industry blamed for the growing virus spread
Meanwhile, Police Colonel Thanes Sukchai of the Immigration Bureau on Phuket has confirmed that foreign workers were the likely source of the latest outbreak with only 76 foreign tourists among over twenty thousand that have arrived through the slowing Phuket Sandbox scheme testing positive for COVID-19.
Local medical experts on the island are also calling for hundreds of thousands of vaccine doses to be administered as a third booster shot to residents of Phuket where 70% of the population was vaccinated before the foreign tourism initiative launched on July 1st.
This was predominantly with the Sinovac vaccine while the Delta variant of COVID-19 has increasingly been shown, in worldwide surveys and research, to be less contained by all brands of vaccines.
Industry chief looks ahead to 2022, sees foreign tourism recovery only from then, linked to vaccines
Overall, Mr Supant Mongkolsuthree of the Federation of Thai Industries has said that he sees the foreign tourism industry only recovering from the end of 2021 and said, this week, that this was still dependent on the government executing its vaccination programme properly before the end of the year.
On this basis, he thought that Thailand could see 6% growth in 2022 driven by a revival of the sector and exports.
The Bank of Thailand expert, Ms Chayawadee, on Tuesday, underlined the fact that the Thai economy has slowed from the end of June to the end of August by most economic measurements despite a rise in government spending of 18% in July.
Problems reported in August with the export sector, questions on consumer confidence recovery
The senior economic analyst noted that August had also seen contracted consumption and problems within the manufacturing and export sector.
She cited a shortage of semiconductors within the electronic industry as one example and also pointed to rising COVID-19 outbreaks in some of the kingdom’s export markets which will hit demand.
Ms Chayawadee agreed that higher numbers of vaccinated people in the kingdom will assist but questioned how quickly the damaged economy and consumer confidence can be restored.
‘Even if, during the middle of the month last August, the number of infected people in the country has begun to decline and the number of people vaccinated is higher. Also taking into account that the government has begun to relax the lock-down measures from September 1st. But overall, how will the economy adjust? Four to five issues still need to be monitored, namely, people’s confidence when the measures are relaxed, how much will they actually spend? Government economic stimulus measures including both direct compensation and expenditure stimulus projects, for example, half of the people get money from the government and then use it to spend. Or will it be kept for future risks?’
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Further reading:
Rising prospect of GDP contraction for 2021 may see government breach the legal public debt limit
Economic fears rising as Thailand faces a bigger crisis than 1997 with rising job losses and debt
Baht falling with confidence in Thailand waning as foreign tourism closure and virus drive funds out
Central bank to lower GDP growth forecast as its attention turns to private sector debt management
Loan bill passes but Thai economic prospects are not bright with a 1.8% 2021 GDP gain predicted
IMF urges government to loosen nation’s purse strings as finances tighten with the tax take down
Failure to pass the ฿500 billion borrowing decree could lead to the dissolution of parliament
Industry leaders and central bank all warn that foreign tourism must return to avoid a collapse
Fact – only 6,556 visitors arrived in Thailand last month compared to 3.95 million in December 2019
Desperate foreign tourism business concerns are clinging to straws as they try to survive the crisis
Challenge of the virus and closure to tourism leads to major long term changes in the Thai economy
Finance Minister says economy must pivot away from tourism with a switch to S-Curve industries
Strengthening baht predicted as investors bet on a reopening of Thailand to mass tourism in 2021
Thailand facing a credit crunch as 3rd virus wave craters the kingdom’s economic recovery plans
3rd virus wave now spells not just economic loss but financial danger as kingdom’s debt level rises
Still time to avoid lockdown says Health Minister as 3rd virus wave dwarfs all infections to date
Thai economy is still in reverse despite rising confidence and a virus threatening a 3rd wave
Reopening of Phuket still not officially approved although it is the ideal test for a broader move
Minister urged not to be afraid to borrow in 2021 as fears grow for a quick foreign tourism revival
Economy to rebound as the year progresses driven by exports and a return of mass foreign tourism
Door closing on quick foreign tourism return as economic recovery is delayed to the end of 2022
Fact – only 6,556 visitors arrived in Thailand last month compared to 3.95 million in December 2019
Desperate foreign tourism business concerns are clinging to straws as they try to survive the crisis
Finance Minister says economy must pivot away from tourism with a switch to S-Curve industries
