( Bangkok, 26th Sept 2020 ) Thailand’s demonstrations that broke out in July this year have continued to this day. Economists at Nomura Securities warned that the current political turmoil in Thailand may hinder the country’s economic recovery from the epidemic. Thailand’s GDP this year is expected to be substantially It shrank by 7.6%.
According to "CNBC" report, Nomura Securities' ASEAN chief economist Oban believes that although Thailand has contained the epidemic, the country's current political turmoil may delay or even destroy the economic recovery.
Oban said that since the Bank of Thailand has no room to cut interest rates, Thailand’s economic performance will depend to a large extent on the actual government expenditures, but the current political uncertainty may affect all important Thai fiscal policies. .
He also predicts that Thailand's GDP this year may shrink by 7.6%, the weakest performance in Southeast Asia.
Sufficient Financial Support
Before the epidemic, Thailand’s economy had many structural problems, such as over-reliance on tourism, and this situation has caused spillover effects on other industries in Thailand.
In addition, the Thai economy is also facing problems such as aging and lack of competitiveness.
However, Oban still pointed out that the Thai government still has considerable fiscal space to support the economy. In the current fiscal year, Thailand has only spent 45% of the 60% of the total budget allocated from borrowed funds. It is expected that the Thai government will not spend enough. , Will continue into the next fiscal year.
The effectiveness of the Thai government’s fiscal policy depends to a large extent on the level of implementation. Oban believes that the Thai government’s performance is not bad.
**Info & Image are taken online
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