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Thailand Economic Monitor : The Road to Recovery (Vol. 2) : Executive Summary (Thai)

Successive waves of COVID-19 disrupted the Thai economy in the first half of 2021, but their impact was mitigated by recovering global demand and substantial fiscal support. After a second wave of COVID-19 infections began in late 2020, the government strengthened public health and social distancing measures to contain the renewed spread of the virus. The shock of the second wave caused the economy to contract by -2.6 percent, year-on-year (yoy), in Q1 2021, following a 6.1 percent drop in GDP in 2020 which was one of the steepest contractions among Association of Southeast Asian Nations (ASEAN) member states. While private investment and manufacturing production recovered to near pre-COVID levels in the first quarter of 2021, weakness in the services and agricultural sector persisted. A third wave of infections that emerged in April 2021 has proven especially severe, and the number of cases surged to over 3,000 per day in May-June 2021. Strict containment measures have reduced mobility and negatively affected consumption and business sentiment. Activity in the tourism sector has remained negligible, and the outlook is clouded by the ongoing impact of COVID-19 across the region, the emergence of new variants, and slow progress on vaccination. However, rebounding goods exports have provided substantial support to the Thai economy, driven by recovering global demand for automotive parts, electronics, machinery, and agricultural products. Cash transfers, public health initiatives, economic recovery programs and other forms of fiscal support have helped shore up private demand while supporting consumption among vulnerable households and attenuating the impact of the crisis on poverty. Going forward, government will need to invest in strengthening the social protection system. Prior to the pandemic social assistance benefits were not very generous and often inadequate to protect the poor. The largest social assistance programs were categorically targeted, and only recently is poverty targeting becoming more prominent. In the years to come it should be a priority to ensure that vulnerable beneficiaries receive adequate support and given the limited fiscal space would also require significant investments in effective targeting. The crisis also further underscores the need to ensure that the social protection system covers the large informal sector in Thailand at all times, not only during crises.

Details

  • Document Date

    2021/07/01

  • Document Type

    Report

  • Report Number

    161562

  • Volume No

    2

  • Total Volume(s)

    2

  • Country

    Thailand,

  • Region

    East Asia and Pacific,

  • Disclosure Date

    2021/07/14

  • Disclosure Status

    Disclosed

  • Doc Name

    Executive Summary

  • Keywords

    small and medium enterprise; enforcement of intellectual property right; Association of Southeast Asian Nations; social protection system; public debt stock; cash transfer program; fiscal support; social assistance; gross fixed capital; real effective exchange rate; Financial Stability; private consumption; vaccination rate; economic recovery; goods export; household debt; liberalization of trade; total public spending; cost of transfer; million people; international tourist arrivals; consumer price index; social assistance program; short-term external debt; social assistance scheme; capital goods import; movement of labor; trade and investment; global value chain; public health initiative; Social Safety Nets; foreign direct investment; central government fiscal; economic shock; Fiscal Sustainability; private investment; core inflation; vulnerable household; global demand; fiscal response; commercial bank; human capital; relief measure; global recovery; domestic borrowing; Economic Stimulus; informal worker; emergency program; vulnerable population; poverty indicator; in poverty; medical response; smaller share; social recovery; downside risk; global pandemic; new strain; vulnerable segment; supply disruption; global trade; digital id; socioeconomic disparity; fiscal risk; low trade; Competition Law; inclusive growth; unique id; eligibility criterion; recent development; domestic liquidity; primary deficit; reasonable assumption; fiscal model; recovery effort; vaccination schedule; global supply; poverty targeting; adversely impact; government plan; international tourism; fiscal space; informal sector; liquidity buffer; real gdp; agricultural product; tourism receipts; merchandise trade; trading partner; global commodity; immediate liquidity; domestic demand; intermediate input; banking system; capital-adequacy ratio; net outflow; macroeconomic indicator; financial system; financial account; international reserve; inflationary expectation; potential output; output gap; market price; oil price; response measure; inflation rate; automotive part; public expenditure; fiscal deficit; guarantee coverage; loan term; eligible borrower; Fiscal policies; fiscal policy; social distance; adequate liquidity; manufacturing production; agricultural sector; construction sector; tourism sector; factor price; loan condition; labor income; pandemic level

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Citation

Thailand Economic Monitor : The Road to Recovery (Vol. 2) : Executive Summary (Thai). Thailand Economic Monitor Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/652021626180833341/Executive-Summary