Thailand’s economy is expected to rebound from the shock caused by the coronavirus pandemic and be ready to reopen to the outside world by the second half of 2021, the kingdom’s finance minister told the Financial Times.
Arkhom Termpittayapaisith also acknowledged that six months of anti-government protests had affected Southeast Asia’s second largest economy, but said the impact had been “limited” as most protests did not drag on and were confined to specific areas of Bangkok.
“Optimistically, I think that by the second half of next year our economy should be restored,” Mr. Arkhom said. “We are projecting our economic growth at around 4%”, the same rate of growth that Thailand achieved in 2018.
Thailand has been one of the Asian economies hardest hit by the economic fallout from Covid-19. Authorities shut the country down to most foreign travelers in March and managed to bring local infections down to near zero. But the measures devastated a tourism industry which generates about 18 percent of gross domestic product.
Mr. Arkhom said that the government, which approved a dossier Recovery plan in May to fight Covid-19, still had enough of those funds available to fight the fallout from the pandemic, without having to allocate more money. “I think we have enough fiscal space for the relief of the economy and the rehabilitation of the economy,” he said.
Of the 1 ton of Thai baht ($ 33 billion) loaned to fight Covid-19 approved by the government, only 38% had been disbursed and a 400 billion baht facility to stabilize the bond market remained intact.
“We didn’t have to use it because the market is functioning well,” Mr. Arkhom said.
He said there were signs that the Thai auto industry – the largest in the region – was picking up and more companies had switched to digital technology in the wake of the pandemic.
To cushion the blow to ailing tourism businesses, the government responded with a “Travel Together” program that subsidizes hotel stays and airline tickets for domestic tourists, which has been extended until April 2021. .
However, authorities expect tourist arrivals to reach just 8m, a fifth of the record 40m that arrived in 2019.
Thailand, with a population of 69 million, last month sign an agreement with AstraZeneca to import 26 million doses of its coronavirus vaccine, which local company Siam Bioscience will also produce. Officials have not set a schedule but have suggested vaccinations could start by mid-2021.
The global epidemic has exposed the vulnerabilities of Thailand’s economy, including its aging population, heavy reliance on tourism and large numbers of people in low-skilled jobs.
Student-led protesters have been demonstrating regularly since July to demand the resignation of the government, a new constitution and limits on the powers of the monarchy.
When asked if this affected the economy, Mr Arkhom did not deny it, but said the protests had less impact than previous episodes of political unrest when opposing political factions clashed violently and camped in the streets of Bangkok.
“If I said no, it would be wrong,” he says. “But I think the protests have been limited to certain areas of Bangkok and are very short lived, compared to previous protests.”
He added: “Overall, our factories are still running, our exports are still going, our global economy is still running. This is the most important thing. ”