June 15, 2020 Thai Enquirer Summary Economic News • Today
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June 15, 2020 Thai Enquirer Summary Economic News Today is the 1st day of the total lifting of the ‘lockdown’ that was implemented after the outbreak of the Coronavirus or COVID-19 The lockdown ended starting 23:00 hrs last night and night businesses were yet to return to their normal scene all across the country. The lifting of the ‘lockdown’ is on a test run for 15-days to see how things will go forward. The lifting of the lockdown is conditional and the ‘state of emergency’ remains in place and many people who have been gathering at the various protest moments have been summoned to come to police station for questioning for gathering during a state of emergency. After this lifting of the ‘lockdown’ the government is looking for welcoming up to 1,000 tourists per day with a select few countries that have managed their COVID-19 outbreak These countries include the likes of China Japan South Korea Australia New Zealand Laos Myanmar Cambodia Taiwan Hong Kong & Macau And possibly Vietnam The target group is business travellers and those wanting medical services and treatment in Thailand. It is reported that a new travel scheme or the so-called “Travel Bubble” scheme has been developed by 4 ministries to allow countries which have managed to control the spread of COVID-19 or have low risk of infection to visit Thailand without the need to enter quarantine for 14 days. The “Travel Bubble” scheme is a new concept in tourism, which is gaining popularity among countries which have managed to contain the spread of the contagion, said deputy government spokeswoman Traisulee Traisoranakul. The Tourism and Sports Ministry expects the scheme to partially reboot the country’s ailing tourism industry adding that, initially, the scheme will target the medical tourism market. Thanawat Phonwichai, director of the UTCC’s Centre for Economic and Business Forecasting, warned of an upward trend in household debt, demanding close monitoring from the government. The UTCC forecast that Thailand’s household debt is likely to rise from 79% of total GDP to more than 80% of total GDP very soon, citing the high level of informal loans with high interest rates by households, investments, non- performing loans (NPLs) for housing and car loans while the country is weathering the adverse effects of the COVID-19, Thanawat said. Meanwhile, the National Economic and Social Development Council (NESDC, formerly called the National Economic and Social Development Board (NESDB), agreed as it said the Covid-19 crisis has had a massive impact on household debt and it is expected to rise to more than 80% of GDP. Thai household debt stood at 79.8 per cent of gross domestic product (GDP) in the first quarter of this year. The pandemic resulted in businesses shutting down in addition to the drought already having hit households hard, leading to increased borrowing of money as incomes declined, NESDC Secretary-General Thosaporn Sirisumphand said, warning that the economic impact will be severe in the 2nd quarter as many businesses have laid off workers, or cut their employees’ salaries. The income shock led to continued expansion of consumers loans, growing 7.1% while consumer loans expanded 7.5% in the 4th quarter of last year, said Thosaporn. NPLs arising from consumption loans is about 3.23% of total consumption loans, up from 2.9% in the 4th quarter of last year. Bad debts amounted to 156 billion baht, he added. The National Credit Bureau (NCB) said it saw an upsurge in non-performing loans (NPLs) created by Generation Y at the end of the 1st quarter. Gen Y has the biggest slice of debt amounting to 4 trillion baht, with 270 billion baht being NPLs, followed by total debt of Generation X amounting to 3.7 trillion baht, with 280 billion baht being NPLs; baby boomers at 84 billion baht, and Gen Z at 1.2 billion each, according to NCB data. NCB chief executive Surapol Opasatien said 50% of 840,000 personal loan accounts belong to Gen Y while this group was also the major contributor to household debt and NPLs in the first quarter. Gen Y borrowers represent 1.6 million overdue personal loan accounts, creating more than 100 billion baht in NPL while Gen X borrowers represent more than 1.1 million overdue personal loan accounts, creating nearly 140 billion baht in outstanding loans. The NCB is keeping a close watch on Gen Z borrowers are between 38 and 54 years old who have loans across all consumer borrowing categories. The NCB chief also warned of the scenario of debt-servicing ability amid coronavirus- induced income shocks. Minister of Finance Uttama Savanayana continues his push for the “Kao Tor Pai Rao Mai Thing Kan (Move Forward, we won’t leave anyone behind) scheme to drive the economy at the grassroots level, Phalang Prachart Party spokesman Thanakorn Wangboonkongchana, as the Finance Minister’s secretary, revealed. Uttama is said to send teams from the ministry to assist local people nationwide on June 18 while Uttama himself is set to attend the opening of a local project to boost the grassroots economy of Village Funds ad community enterprises in Samut Prakan province. Deputy Prime Minister Somkid Jatusripitak will preside over the opening of the project. Political News On the new development on Phalang Pracharat Party (PPRP)’s leadership change, it is now certain that Deputy Prime Minister Prawit Wongsuwan looks set to take the PPRP’s helm. Paisal Puchmongkol, former advisor to Gen Prawit, wrote on his Facebook page confirming that a reshuffle of Phalang Pracharat executive committee members is now completed. He said the party is just waiting for the right time to make an official announcement and that it is not easy to change a party manager but what is harder is the “government manager”. Paisal went on to cite records of changes to leadership posts of several parties in the past that involved “men in uniforms” such as Pol Gen Pao Sriyanont, who was tipped to manage the pro-military Seri Manangkhasila Party, General Prapas Jarusathien, who was tipped to manage the Sahaprachathai Party; Air Chief Marshal Somboon Rahong who managed the National Peace-keeping Council (NPC)-backed party as well as Maj Gen Sanan Kachornprasart, who was tipped to manage the Democrat Party. Paisal said he cited all these late military figures of the past because he wanted to confirm that Gen Prawit is now taking control of the PPRP. The latest Super Poll survey found that numbers of opponents of the government grew larger to 54.4% from 52.2% in the previous survey after the Phalang Pracharat Party (PPRP)’s executive committee members resigned en masse. The survey found that numbers of government supporters declined to 22.3% while those who count themselves in the silent majority down to 23.3% to 27.4%. People were asked to express their political sentiment from November 2019 until after easing of COVID-19 lockdown restrictions in June 2020, said Super Poll Research Office director Noppadol Kannikar. The poll was carried out during June 5-13, 2020 on the topic, “People and their political views”. The survey was conducted on 3,087 people aged 18 and above from all walks of life. When asked about their quality of life after the current government took office more than 1 year, a majority of respondents or 43.2% said their quality of life was worse than before; 31.5% said it was worse as usual; 21.9% said it remained the same while merely 3.4% said their lives are better. Pheu Thai Party spokesman Anusorn Iamsa-ard called for Prime Minister Prayut Chan-o-cha to dissolve parliament, citing that a majority of people, 70.5%, wants Gen Prayut to dissolve the House to return sovereign power to the people to allow a snap election to be called, according to the results of a Super Poll survey on the topic, “Khon Dee, Kan Mueang” [Good people and Politics in Thai] conducted during June 9-12, Meanwhile, 17.5% of respondents want to see a reshuffle of the cabinet while 11.7% wants the current cabinet to keep working. Super Poll Research Office director Noppadol Kannikar said the dissolution of the House is the best option for Gen Prayut at the moment if he wants to avoid foreseeable turmoil inside his government at the end of the year. Mr Anusorn pointed that Gen Prayut cannot maintain the state of emergency in order to strengthen his power forever. Gen Prayut has 2 options -- stepping down or dissolving the House to take responsibility for his administration failure for the past 6 years. Speculation is rife that the prospect of local elections is ridden with uncertainty following reports that Deputy Prime Minister Wissanu Krea-ngam came out to admit that a budget set aside for the local polls has been drawn into a central pool to fund the fight against Covid-19. Wissanu said the prospect of local elections scheduled to be held later this year could be pushed back after all budgets set aside for local administrative organisations to organise local polls have been transferred to the government’s central fund to fight the pandemic, raising the questions that local bodies may not have enough funds to finance the polls. Unlike general elections, local administrative bodies have to use their own budgets allocated by the Ministry of Interior to organise the polls, Wissanu said, adding that the government only covers central budgets allocated for the Election Commission (EC). The Interior Ministry oversees the readiness of local elections by informing the government to ask the EC to set the date for local polls.