Will the government announce a lockdown? There is no clear conclusion from the government. But the Monetary Policy Committee (MPC) has issued an announcement on the policy interest rate to remain at 0.5% per annum and forecast that Thai businesses will continue to recover despite low risk and uncertainty. high
However, the situation and new measures of COVID-19 epidemic control must be assessed, while the next phase depends on the return of foreign tourists. Effectiveness and distribution of the vaccine against COVID-19 and the development of the labor market, which still has high numbers of unemployed and virtually unemployed.
Therefore, maintaining the policy interest rate to maintain the limited monetary policy capacity for use at the most appropriate and effective timing.
There is also an interesting overall evaluation number, whether it is
- The Thai economy in 2020 will contract by -6.6%, better than previously estimated -7.8% from a contraction of private consumption to -1.4% (from -3.5% previously contracted). The inflation rate dropped to -7.4% (from -8.2%) and the number of foreign tourists estimated to be 6.7 million. Headline and recovery inflation was in line with previous estimates – 0.9% and 0.3% respectively.
- The Thai economy in 2021 will expand at 3.2%, down from the previous forecast of 3.6%. In 2022, the Thai economy will expand at 4.8%. The key comes from lowering the estimate of foreign tourists to 5.5 million (from 9 million).
But the number of foreign tourists will recover clearly in 2022 at 23 million people, so the Thai economy expanded significantly in that year. This brings the economy back to pre-COVD-19 levels in the second half of 2022. Headline inflation will revert to its mid-2021 target of 1% and will be close to the lower edge of the COVD-19 range. Target frame throughout the forecast period
The estimated figures are under the consensus that
- The government has been able to control the outbreak of COVID-19 in the latest round and has implemented some city shutdown measures.
- More than 30% of the population will be vaccinated by major economies in Q2 2021, while 20% of the Thai population will be vaccinated by the fourth quarter of 2021.
- Thailand will start accepting foreign tourists who are vaccinated. (But must have a certificate of vaccination and infection test) without quarantine in the second quarter of 2021
- Most countries, including Thailand, were immunized to mass immunity in the second half of 2022 and Thailand began accepting foreign tourists without vaccination and quarantine conditions.
The MPC assesses that the liquidity in the financial system is high but is not evenly distributed. The MPC estimated that some businesses and households that needed liquidity were unable to access credit. Especially SMEs in the area of exchange rate Thai baht against the US dollar fluctuates in line with regional currencies.
The MPC was concerned about the rapid appreciation of the baht due to the risk-on sentiment of investors and the weakening of the US dollar. Therefore, it is deemed necessary to follow up closely and consider the necessity of additional appropriate measures. As well as continuously pushing for the creation of a new FX ecosystem (FX ecosystem)
Government measures and inter-agency policy coordination are essential to the next phase of economic recovery. The monetary policy must continue to be relaxed. Financial and credit measures should accelerate the spread of liquidity to those affected in a timely and timely manner, such as credit guarantee measures to reduce credit risk. As well as pushing for financial institutions to accelerate debt restructuring for a wider effect
While fiscal measures have to support the economy without interruption Especially to accelerate disbursement under the economic recovery plan Along with implementing supply policies to adjust business models and improve labor skills. This will help the economy recover sustainably.
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