The move comes as Thailand’s economic leadership resumes regular meetings with dismal numbers emerging from the country’s industrial and export sector for May. Thailand’s exports, one month after the country began its phased reopening, showed a contraction of 22% on the figure from last year.
The Thai Prime Minister has ordered his top tier economic team of ministers to get back to a regimen of regular meetings after the economic cabinet halted it’s Friday get together in March at the height of the Covid 19 emergency. The first meeting was due to take place this Friday but was postponed until Saturday. On July 24th, the economic cabinet will meet to discuss, in particular, the devastating impact that measures to contain the virus pandemic has had on Thailand’s once-vaunted foreign tourism industry, the jewel in the kingdom’s economic crown.
A full meeting of Thailand’s economic cabinet will meet on Friday, the 24th July, to address the fallout and damage to the economy caused by Thailand’s ban on incoming passengers and the full collapse of the kingdom’s lucrative foreign tourism market, an unprecedented situation in modern history.
It is now being suggested that Thailand may stand to lose between ฿1.5 and ฿2 trillion in income this year as a result of a continued prohibition of incoming tourists since early April.
Bubble tourism concept thrown out this week
The Covid 19 centre on Tuesday threw out plans to relaunch Thailand’s foreign tourism industry touted by Tourism Minister Phiphat Ratchakitprakarn based on a bubble concept and targeted at a select number of Asian countries, but primarily China, from August.
The economic cabinet will meet again for the first time since it was suspended in late March due to the Covid 19 situation this Friday under the chairmanship of Prime Minister Prayut Chan ocha.
Demanding economic situation comes amid speculation on the political future of Deputy PM Somkid and his economic team
The meeting of the economic team comes amid speculation on the future of Deputy Prime Minister Somkid Jatusripitak in an anticipated government reshuffle following a change of leadership in the ruling Palang Pracharat Party and the arrival of Deputy Prime Minister Prawit Wongsuwan, an ally and colleague of the Prime Minister, at the helm of the party
Palang Pracharat oversees four key economic ministries including Finance, Higher Education, Industry and Energy.
Ministers resigned from government party on Thursday, speculation of a cabinet reshuffle
On Thursday, three senior economic ministers within the Palang Pracharat Party all resigned from the political movement. These include the Finance Minister, Uttama Savanayana, Higher Education, Science and Innovations Minister, Suvit Maesincee and Energy Minister, Sontirat Sontijirawong.
The deputy secretary-general at the Prime Minister’s Office, Kobsak Pootrakul, who works closely with Deputy Prime Minister Somkid, has also resigned his party membership. The Deputy PM himself has never been a member of Palang Pracharat.
It is now thought the resignation of the three senior ministers will also see their removal from the cabinet, as, under the terms of the coalition agreement, these ministries are within the remit of the Palang Pracharat Party although the Prime Minister, General Prayut, has always asserted his prerogative in making cabinet appointments.
Despite this, there is intense speculation that a cabinet reshuffle will now take place. This has coincided also with speculation on the government’s economic performance.
On Friday, the PM confirmed the cabinet reshuffle but would not be drawn on when. He indicated that he will use the opportunity for a complete overhaul of the government.
Bad economic data from May on the agenda
The other four departments are the Department of Labour which is overseen by the smaller ACT party, the Agriculture Ministry and Commerce Ministry overseen by the Democrats and the Tourism Minister which has a Bhumjaithai Party minister.
This Friday’s meeting is now postponed to Saturday. It comes as the catastrophic impact of the virus is making itself clear. Ministers and top officials will review a series of striking and sobering figures that have emerged from May’s data published by the Ministry of Commerce.
Prime Minister to chair Friday’s meeting
Mr Kobsak, a key ally of Deputy PM Somkid, is coordinating this week’s meeting.
First, he revealed that the PM, Prayut Chan ocha, has asked for the economic cabinet, made up of ministers from a range of eight ministries as well as their key officials to begin meeting twice a week given the increasingly pressing situation economically.
Mr Kobsak said the Prime Minister is looking for a recovery plan within a 6 to 12-month timeline.
He then revealed the bad news.
Exports plummeted 22% on last year for May with industrial output down by 20%, investment by 10%
Exports plummeted by 22% in May while Thailand’s industrial output declined by 20%. Investment was down by 10%.
Taken with the cratered foreign tourism sector, this presents a bleak outlook. The figures apply to the period when Thailand began to reopen its domestic economy following a full lockdown in April.
Thailand began reopening in a four-stage process.
The figures highlight extensive damage to the economy caused by external factors including the dislocation of markets but also the impact of the domestic shutdown.
‘The government and the private sector must hold talks to find solutions and all involved should be allowed to take part,’ Mr Kobsak stated this week.
Government in a race to finalise ฿500 billion bank loan scheme for small business employers
The key government fixer wants to see ministers finalise plans to allow small and medium businesses immediate access to soft loans being facilitated by the Bank of Thailand.
The loans will be targeted at 3 million vulnerable businesses and involve funds being made available at a marginal interest rate to participating banks to lend out.
In the meantime, the government proposes to absorb the interest charge, estimated at 2% to the target companies, for the first 6 months.
The scheme involves a fund of ฿500 billion and is being made available so that these firms can stay afloat and maintain employment within the economy.
Only firms making bank repayments at the end of 2019 eligible for new loans support scheme
The scheme is only eligible to firms that are not listed for investment purposes and who, up until the end of 2019, were servicing their bank debt and making repayments within 90 days.
The maximum credit limit for a loan to be made available under the scheme is ฿500 million.
Applications for the scheme began being accepted from April 27th this year but it now needs to be launched. This will be a key focus of Friday’s meeting.
‘The economic cabinet meeting with the prime minister as chairman will be for everyone to help move the economy forward. It will address problems which require collaboration from all ministries involved,’ Mr Kobsak explained.
Further reading:
Thai economy has until October to rebound or bad debts will begin to weigh heavily on the banks
Election of Prawit as Palang Pracharat leader will see more grassroots politics in government
Economic hole caused by virus pandemic yawns as Bank of Thailand flags large current account loss
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Baht again being targeted by big money piling even more misery on an already crippled Thai economy
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Thailand and US aim for a new more ‘proactive’ trading relationship as ambassador meets Prayuth
No limit on borrowing as Somkid plots the biggest stimulus package yet to address the virus crisis
