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Thailand Biggest Economic Slump Since 1998 Means More Government Stimulus

#Thailand #economy #stimulus #coronavirus

Thailand’s economy suffered its biggest annual contraction since the 1998 Asian financial crisis in Q-2 due to the fallout of the coronavirus chaos, prompting the government to slash its GDP forecast for the year and announce more stimulus

Data from the state planning agency showed a 100% fall in foreign tourism dealt the biggest blow to Southeast Asia’s 2nd-largest economy, while the coronavirus and measures to curb it also hit consumption, private investment and exports.

New Deputy Prime Minister Supattanapong Punmeechaow told a media conference the government would announce more stimulus this month, “to support the economy and all groups of affected people,” adding these would be discussed at a 19 August meeting.

The data, which also showed a record contraction Q-Q, represents another issue for the government, also facing its biggest anti-government protests since the Y 2014 coup.

Monday’s economic release underscores the collapse of aggregate demand, both externally and internally.

Thailand’s economy is heavily reliant on tourism and exports, shrank 12.2% in Q-2 from a year earlier after a revised 2.0% fall in Q-1. It fell a record 9.7% on the Quarter, on a seasonally adjusted basis.

The National Economic and Social Development Council (NESDC) cut its GDP forecast for the year, expecting the economy to fall 7.3%-7.8% in Y 2020. The economy saw a record annual contraction of 7.6% in Y 1998.

Monday, the NESDC said it expected only 6.7-M foreign tourists to come to Thailand this year after last year’s record 39.8-M and said there were no foreign tourists in Q-2.

Meanwhile, NESDC expected a 10% fall in exports in Y 2020, having previously forecast an 8% decline.

The government has already supported the economy with a $61-B fiscal stimulus package, the central bank has slashed interest rates by 75 bpts this year to a record low of 0.50%.

Have a healthy week, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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