In a time when the Thai economy is severely struggling, the government must find ways to mitigate the impact on the people using the available tools, including monetary and fiscal policies, to support Thai businesses through these challenges with minimal pain. If the real sector falters, it will inevitably lead to a chain reaction of negative effects.

Although the COVID situation in Thailand has improved, with no domestic infections reported for over 30 days, the effects of the lockdown, which lasted more than three months since the declaration of the Emergency Decree on March 26, have left the Thai economy battered.

Ultimately, behaving responsibly has earned a 'reward' from the government, which has begun to ease restrictions on various businesses. The only remaining hurdle is the reopening of international airspace, allowing businesses of all sizes to start reopening their storefronts under strict health measures, particularly social distancing.

In the initial phase of easing restrictions, we witnessed a surge in consumer spending and domestic travel, as people were no longer required to stay at home. This was especially evident in coastal cities like Pattaya, Cha-am, and Hua Hin, where hotel bookings were high during weekends and recent long holidays.

However, the Thai economy remains in a precarious state, and as we enter the 'second half of the year,' it must be acknowledged that businesses, salaried workers, and daily wage earners still see little prospect for increased income. The best they can do is to 'stay afloat' without sinking further. Any improvement will likely be minimal, stemming from Thailand's economic structure, which heavily relies on foreign income, including exports and tourism, accounting for over 70% of the GDP. With COVID wreaking havoc globally, Thailand cannot escape the severe impacts on its economy.

Therefore, it is concerning to consider the state of 'purchasing power' after the initial excitement of easing restrictions fades. With no increase in disposable income and a tendency for it to decrease, people are becoming poorer, leading to tighter budgets. Stimulating the economy through domestic purchasing power is not an easy task at this moment.

Compounding this issue are the various relief measures for affected sectors that are gradually reaching their deadlines, including debt moratoriums and support for farmers and freelancers. This indicates that the barriers protecting against the impact of COVID are about to be dismantled, revealing the 'truth' of the Thai economy in the third quarter, alongside the pent-up conditions of businesses, leading to permanent closures and layoffs, which is extremely concerning.

In this difficult situation, it is inevitable that the government must find ways to reduce the impact on the people using the available tools, including monetary and fiscal policies, to support Thai businesses through these sharp challenges with minimal injury. This is crucial because if the real sector, which involves countless individuals throughout the supply chain, falters, it will lead to a domino effect. The anticipated 2-3 years for the Thai economy to recover to pre-COVID levels may take much longer.

SOURCE : www.bangkokbiznews.com