Thailand’s economy should rebound from the shock dealt 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 south-east Asia’s second largest economy, but said the impact had been “limited” because most demonstrations did not drag on and were confined to specific areas of Bangkok.
“Optimistically, I think by the second half of next year, our economy should be recovered,” Mr Arkhom said. “We project our economic growth at about 4 per cent,” the same rate of growth Thailand achieved in 2018.
Thailand has been one of the Asian economies hit hardest by the economic fallout of Covid-19. Officials closed the country to most foreign travellers in March, and have managed to bring local infections down to near zero. But the measures devastated a tourism industry that generates about 18 per cent of gross domestic product.
Mr Arkhom said that the government, which approved a record stimulus package 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 that we have enough fiscal space for the relief of the economy and the rehabilitation of the economy,” he said.
Of the 1tn Thai baht ($33bn) in borrowing to combat Covid-19 approved by the government, just 38 per cent had been disbursed, and a 400bn baht facility to stabilise the bond market remained untouched.
“We haven’t had to use it because the market is functioning well,” Mr Arkhom said.
He said there were signs that Thailand’s automotive industry — the largest in the region — was picking up, and that more companies had shifted into digital technology as a result of the pandemic.
To cushion the blow to struggling tourism companies, the government has responded with a “Travel Together” programme that subsidises hotel stays and airline tickets for domestic tourists, which has been extended until April 2021.
However, officials expect tourist arrivals to reach just 8m, one-fifth of the record 40m who arrived in 2019.
Thailand, with a population of 69m, last month signed an understanding with AstraZeneca to import 26m doses of its coronavirus vaccine, which local company Siam Bioscience will also produce. Officials have not set a timetable but have suggested that vaccinations could begin by mid-2021.
The global outbreak brought into focus vulnerabilities in the Thai economy, including its ageing population, heavy reliance on tourism and the large number of people in low-skilled jobs.
Student-led demonstrators have been protesting regularly since July to demand the government’s resignation, a new constitution and limits on the monarchy’s powers.
When asked whether this had affected the economy, Mr Arkhom did not deny it, but said the demonstrations had a smaller impact than previous bouts of political unrest when opposing political factions clashed violently and camped out on Bangkok’s streets.
“If I said no, that would be untrue,” he said. “But I think the protests have limited themselves to certain areas of Bangkok and are very short-term, as compared to the previous protests.”
He added: “Overall our factories are still running, our exports are still running, our overall economy is still running. That’s the most important thing.”