CIMB cuts Thai economic growth in the year 64 from 4.1% to 2.6%, revealing key factors from the second round of the COVID-19 epidemic, including political problems. And exposure to foreign tourists To delay further
Dr. Amon Thep Chawala, Executive Vice President, Research Office, CIMB Thai Bank Have assessed the conditioneconomy With the return of the coronavirus outbreak, round 2, causing the research office CIMB Thai Bank Downgrade forecastseconomyIn 2020, down slightly from -6.6% to -6.7% and in 2021 from 4.1% to 2.6%, adding three key assumptions. The first is the outbreak ofCOVID-19 The long haul continues in the first trimester and keeping a distance is still imperative throughout the year. The second story is Political problems that may backfire on investor and consumer confidence. Next year if Congress and protesters fail to find an agreement quickly. And the third is Delays in opening to foreign tourists Both from the outbreak in foreign countries And the fact that people in the country have not received the vaccine
New coronavirus Has clearly affected private consumption, especiallyTravelIn a country that has the opportunity to continue to decline until the middle of next year Affecting the hotel, restaurant, transport and other businesses linked toTravel People in the affected areas are also wary of traveling away from their homes. Businesses and schools May start working and studying from home in the first trimester. Which will affect physical activitieseconomyIn retail Especially those that do not have online sales channels
evenThai economyWill not shrink severely Like facing a lockdown in the second quarter Because the government sector has relaxed physical activitieseconomyBy some area But from the outbreak that still has many infected people. It affects the confidence of consumers. As well as entrepreneurs who sell products and food Has decreased during the time when many people avoid traveling outside the home Make a lack of income And may affect employment
Although unemployment may not increase much But working hours may be reduced. As a result, non-agricultural incomes remain weak in 2021, therefore, private consumption is likely to be weaker than previously expected and there is a risk thatThai economyWill remain seeped throughout the year
Although domestic consumption was at greater risk of contraction than expected in the first quarter. And may recover slowly, butThai economyIt should be supported by product exports next year. Especially when the government in foreign countries Issuing stimuluseconomyAnd pay remedies to those affected byeconomy From unemployment or reduced income fromCOVID-19
evenThai economyWill not shrink severely Like facing a lockdown in the second quarter Because the government sector has some easing of economic activities in the area But from the outbreak that still has many infected people. It affects the confidence of consumers. As well as entrepreneurs who sell products and food Has decreased during the time when many people avoid traveling outside the home Make a lack of income And may affect employment
Although unemployment may not increase much But working hours may be reduced. As a result, non-agricultural incomes remain weak in 2021, therefore, private consumption is likely to be weaker than previously expected and there is a risk thatThai economyWill remain seeped throughout the year
Although domestic consumption was at greater risk of contraction than expected in the first quarter. And may recover slowly But the Thai economy should be supported by product exports next year. Especially when the government in foreign countries Issuing economic stimulus measures and providing remedial money for people affected byeconomy From unemployment or reduced income fromCOVID-19
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In addition, liquidity in the financial markets is high due to the introduction of QE measures and low interest rates. This has resulted in a fast recovery of overseas consumption and investment despite the high number of daily infections. The fast recovery of foreign demand, especially in the US and China. Will help support the export of food products electronics And automotive parts next year
Chemical products and agricultural products should be priced higher than this year as higher oil prices will help.ExportOf Thailand to ASEAN better by seeing thatThai economyWill return toDurian modelAgain, strong external demand supported exports. But domestic demand is weak. Impact consumption and employment
In addition Thai economyStill facing the problem of uneven recovery or K-shaped recovery, ie middle-income people And salaryman And big business Should still be able to be the main force to sustain the economy With overflowing liquidity But the other side is that people with low income Self-employed And small businesses Should still have problemseconomyLong to go for the next year From income that remained weak following domestic purchasing power
The hope of stimulating domestic demand is likely to come from.Ministry of Finance and Bank of Thailand (BOT) In accelerating the recovery of those affected by the economy Both government employment through rural infrastructure projects Accelerating public investment Money transfer takes care of low income people. Or measures to reduce expenses, such as half a project And may see confidence building high incomes to stimulate consumption through additional tax measures.
sideBank of Thailand It is likely to find a way to relax the criteria for injecting liquidity into small businesses through Softloons. And may cut the policy interest rate further to mitigate the economic impact and reduce interest expenses for households and households. Thai economyContinued risks from this year as the number of COVID cases increases And from the political uncertainty affecting the confidence of investors and consumers. But we think that domestic risks are not as severe as foreign ones, such as trade protectionism that may have continued in the Biden period. And from the problem of hot money that may spill into the Thai capital market due to the overflowing liquidity in foreign countries, the baht strengthened and affected the competitiveness of exporters.
Exchange rate Maintain the view of the baht appreciation at 28.6 baht per US dollar at the end of next year due to the hot money that will spill into the Thai capital market. In addition, Thailand continues to maintain a high trade surplus, which encourages the baht appreciation for the long haul. In terms of policy interest rates There is a chance that the Monetary Policy Committee will cut the interest rate down to 0.25% to support economic recovery.Thai economy The Thai economy is at risk of a slow recovery in 2021, but after more vaccines and better control of the outbreak abroad. Tourism should return and should help the Thai economy accelerate better in 2022.
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