BoT chief predicts patchy recovery
Bank of Thailand Governor Sethaput Suthiwartnarueput (Photo by Bank of Thailand)
Economic inequalities are expected to widen once the epidemic is brought under control, as low-income people are likely to continue to suffer from the impact of the pandemic during a patchy recovery, Bank of Thailand Governor Sethaput Suthiwartnarueput said.
Thailand was struggling with economic inequality and social injustice before the pandemic, which only made those problems worse, he said.
Fragile segments such as low-income households and small and medium-sized enterprises (SMEs) will continue to suffer from inequality as a predicted K-shaped recovery would be uneven, Mr Sethaput said at the BoT Symposium 2021 yesterday.
Covid-19 also appears to have a more negative impact on those segments with less resources, according to early public health data, he said.
These vulnerable segments have a lower capacity to recover, which could increase social tensions in the future.
A major economic shock such as a pandemic greatly affects these fragile segments, especially if incomes are reduced.
The impact can create an economic scar and delay recovery. The result can mean a decrease in household and business assets, a reduction in the skilled workforce and an increase in debt or over-indebtedness, Mr. Sethaput said.
These scenarios reduce the ability of households and businesses to spend and invest, causing economic recovery to take longer, he said.
Mr Sethaput said Thailand has limited ability to withstand economic shocks in the new economic landscape amid higher uncertainties.
As a result, Thailand needs good risk management, economic reform, industrial restructuring, creating a safety net and reducing the economic scar in anticipation of any crisis. , did he declare.
The central bank yesterday reported that Thailand’s economy in August continued to be affected by the global epidemic, senior director of the economic and political department Chayawadee Chai-Anant said.
Private consumption indicators fell despite government support measures due to low household purchasing power and strict containment measures.
In August, the private consumption index fell 2.6%, against a contraction of 4.4% the previous month.
Merchandise exports declined in several categories as demand from trading partners eased after the epidemic situation worsened overseas, Chayawadee said.
In August, exports contracted 3.5% month-on-month against a 0.9% contraction in July.
Meanwhile, the numbers of foreign tourists have declined due to the severe epidemic.
Arrivals of foreign tourists totaled 15,105 in August, compared to 18,056 in July.
The current account also posted a larger deficit in August compared to the previous month, mainly attributed to the trade balance as merchandise exports weakened, she said.
Ms Chayawadee said economic activities started to pick up from the end of August, mainly supported by the progress of the vaccination program.