Thai Economy Further Contracts in April as Covid-19 Halts Tourism-Exports Sector

Thailand’s economy further contracted in April as the Covid-19 containment measures in both domestic and overseas have temporarily halted economic activities, said BOT.

 

Bank of Thailand released the Economic and Monetary Conditions for April 2020 on Friday, stated that the tourism sector drastically contracted due to a temporary ban on all international flights and inbound travel restriction regulation, provoking the number of foreign tourist arrivals contracted by 100% year-on-year.

 

Goods exports excluding gold contracted at a higher rate of 15.9% YoY, mainly due to the high contraction in exports of automotive and parts, petroleum-related products, electrical appliances and machinery and equipment, consistent with the substantial decline in trading partner demand and global crude oil prices, However, exports of some products expanded such as electronic products, agro-manufacturing products and agricultural products, due to the benefit during the period of the COVID-19 outbreak, said statement.

 

Private consumption indicators highly contracted as a result of weakening purchasing power and the containment measures. Private investment indicators and manufacturing production continued to contract significantly following demand conditions and economic uncertainties. 

 

However, public spending continued to expand from both current and capital expenditures. In this month, the government began to transfer financial relief to those affected by the COVID-19 outbreak which would support the economy going forward.

 

On the stability front, headline inflation was more negative from energy prices as a result of falling global crude oil prices and the government’s electricity bill subsidy measure. Labor market was more vulnerable. The current account registered a deficit. The capital and financial accounts posted a surplus mainly from the asset position.