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Economist at UOB Group Barnabas Gan reviewed the latest measures by the Thailand government to support the economy.

Key Quotes

“As of 2Q20, the Thai Cabinet has approved a total of THB2.4 trillion (15% of GDP) of support measures to combat the negative effects of COVID-19. The measures included three stimulus tranches, including THB400 billion on 10th March, THB117 billion on 24th March, and THB1.9 trillion on 7th April.”

“Since then, more stimulus measures have been introduced to revitalise the tourism industry, encourage domestic consumption, improve the job market, and alleviate economic hardships especially for the low-income earners. Collectively, we estimate that around THB176 billion (1.1% of GDP) has been announced since the third stimulus tranche in April. This will bring Thailand’s total fiscal COVID-19 response to 16.1% of GDP.”

“Despite the massive stimulus measures seen year-to-date, Thailand’s economy remains in a recession. The Bank of Thailand in its latest Monetary Policy Meeting, pencilled a GDP contraction of 7.8% in 2020, up from a prior forecast of -8.1%. This compares to our full-year GDP outlook of -7.5%.”

“With monetary policy space running low given BOT’s benchmark rate already at a record low of 0.5%, more fiscal stimulus measures may be on the cards. The Thai authorities will reportedly meet on 7 October 2020 to mull over more measures to shore up growth and encourage domestic consumption.”