The virus that triggered a supply shock in China has now caused a global shock. Developing economies in East Asia and the Pacific (EAP), recovering from trade tensions and struggling with COVID-19, now face the prospect of a global financial shock and recession.

Sound macroeconomic policies and prudent financial regulation have equipped most EAP countries to deal with normal tremors.  But we are witnessing an unusual combination of disruptive and mutually reinforcing events. Significant economic pain seems unavoidable in all countries. 

Countries must take action now

Countries must take action now – including urgent investments in healthcare capacity and targeted fiscal measures – to mitigate some of the immediate impacts, according to East Asia and Pacific in the Time of COVID-19, the World Bank’s April 2020 Economic Update for East Asia and the Pacific.

In a rapidly changing environment, making precise growth projections is unusually difficult. Therefore, the report presents both a baseline and a lower case scenario.

Growth in the developing EAP region is projected to slow to 2.1 percent in the baseline and to negative 0.5 in the lower case scenario in 2020, from an estimated 5.8 percent in 2019.

Growth in China is projected to decline to 2.3 percent in the baseline and 0.1 percent in the lower case scenario in 2020, from 6.1 percent in 2019. Containment of the pandemic would allow for a sustained recovery in the region, although risks to the outlook from financial market stress would remain high.

The COVID-19 shock will also have a serious impact on poverty

The report estimates that under the baseline growth scenario, nearly 24 million fewer people will escape poverty across the region in 2020 than would have in the absence of the pandemic (using a poverty line of US$5.50/day).

If the economic situation were to deteriorate further, and the lower-case scenario prevails, then poverty is estimated to increase by about 11 million people. Prior projections estimated that nearly 35 million people would escape poverty in EAP in 2020, including over 25 million in China alone.

“Countries in East Asia and the Pacific that were already coping with international trade tensions and the repercussions of the spread of COVID-19 in China are now faced with a global shock,” said Victoria Kwakwa, Vice President for East Asia and the Pacific at the World Bank. 

“The good news is that the region has strengths it can tap, but…

Source link : EAP Countries Brace for Economic Shock of COVID-19 by World Bank

All commercial banks in Thailand have pledged to offer special financial aid to customers and businesses affected directly or indirectly by the economic implications of COVID-19, ensuring sufficient cash for customers to make withdrawals at any time.

The Thai Bankers’ Association Chairman Predee Daochai has ensured all banks have prepared a supply of cash for withdrawals by customers at all 6,800 branches and 54,000 ATMs across the country.

Banks are however encouraging customers to make transactions electronically to minimize their exposure to the coronavirus, and have prepared their network to cope with increasing transactions online.

To mitigate economic implications from the COVID-19 pandemic which has been disrupting the economy since February, commercial banks have offered refinancing services to some 30,000 clients, worth 234 billion baht in total.

Some of these clients have been offered a pause in principal payments, an interest rate cut, or a payback extension to help ease their economic burden.

A 150 billion baht soft loan has been made available, offering an up to 20 million baht loan to each customer with 2 percent annual interest rate and a two year payback period.

This loan will be offered to businesses who wish to improve their liquidity starting in April. Requests can now be made at participating banks.

The Government Housing Bank Chief Financial Officer Paninee Manosan, said today the bank now allows customers with mortgages worth 20 billion baht in total to make only their monthly interest payment for up to six months, to ensure they can keep their homes and have sufficient cash for living expenses. This offer is valid for regular customers, and non-performing loan (NPL) customers. Registration is required from now until 30 December 2020.

The post Thai Banks launch packages for clients affected by COVID-19 appeared first on Thailand Business News.

Source link : Thai Banks launch packages for clients affected by COVID-19 by National News Bureau of Thailand

The impact of COVID-19 on the tourism sector in Thailand is apparent. The number of passengers using Suvarnabhumi Airport has declined sharply, as many countries have closed their borders and airlines have suspended flights.

Airports of Thailand (AOT) and Suvarnabhumi Airport announced that 726 flights arrived at and departed from Suvarnabhumi Airport on March 15, down 33 percent year-on-year. The airport welcomed 79,899 passengers, down 60.2 percent year-on-year. There were only four flights from South Korea, two Thai Airways International and two from Korean Air.

The four flights carried 492 passengers in total, 190 of whom were Thai nationals. One Thai passenger has been placed in quarantine as a precaution. Three passengers did not carry a medical certificate with them, and they are now being observed by disease control officials. Two airport staff are also quarantined.

Suvarnabhumi Airport again saw a handful of both Thai and foreign passengers, with international flights to at-risk countries having been suspended. The number of international flights arriving in Thailand has decreased.

The Digital Economy and Society Minister, Buddhipongse Punnakanta, said two mobile applications, namely “AOT Airports” and “SydeKick for ThaiFightCOVID”, can now be used to track quarantined passengers and people who are under home quarantine.

Those arriving from at-risk countries have to register and provide their personal information. The Department of Disease Control will use the information to locate them. Both apps show real time data.

The Ministry of Digital Economy and Society has delivered the apps to the Department of Disease Control and the AOT. They have been developed to restore public confidence.

The post Two Apps to monitor quarantined individuals in Thailand appeared first on Thailand Business News.

Source link : Two Apps to monitor quarantined individuals in Thailand by National News Bureau of Thailand

Thai stock exchange nosedived on Thursday morning after the World Health Orghanization declared a global Covid-19 pandemic and the US banned the entry of travellers from mainland Europe.

The Stock Exchange of Thailand (SET) index plunged more than 10% triggering phase one of an automatic circuit breaker for 30 minutes.

The first stage occurs if the SET index falls by 10% from the previous day’s close. All trading in listed securities is halted for 30 minutes.

The second stage occurs if the index falls by 20%, or another 10%, from the previous day’s close. Trading in all listed securities is halted for one hour.

The post Thai SET in free-fall triggers circuit breaker appeared first on Thailand Business News.

Source link : Thai SET in free-fall triggers circuit breaker by Carlos Fuitzer

 The global spread of the COVID-19 disease is perceived by the private sector to be a significant setback for both the Thai and global economies.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) has reduced this year’s national GDP projection from 2-2.5 percent to only 1.5-2 percent.

Acting as the JSCCIB chief, the Chairman of The Federation of Thai Industries Suphan Mongkolsuthree said today the committee has adjusted Thailand’s 2020 GDP projection down to 1.5 to 2 percent from the previous figure at 2 to 2.5 percent, while the export sector is expected to perform at a negative 2 to 0 percent; the inflation rate is expected to be 0.8 to 1.5 percent.

He said the epidemic of COVID-19 disease in many countries of the world, has had a widespread impact on the trading and manufacturing sectors, while urgent economic measures from the government are not likely to be able to compensate for the consequences of the epidemic.

COVID-19 fears have already affected the tourism industry and industrial supply chains, resulting in employee layoffs and even closures of some companies. The economy is expected to continue slowing down necause of other factors such as severe drought, affecting domestic purchasing power.

The JSCCIB is now closely monitoring the development of the COVID-19 epidemic, while commenting that certain Thai companies competing with Chinese companies may benefit from this situation, as such companies could continue to manufacture goods at full capacity, while Chinese companies cannot. Companies relying on China may however face difficulties.

The committee is optimistic that economic activity will start to recover in the final quarter of this year. It is asking the government to take urgent monetary and financial measures to help companies reduce costs and enhance their liquidity. The committee will be proposing its ideas to the government in the Economic Ministers meeting on Friday.

The post Private sector cut GDP expectations after COVID-19 impact appeared first on Thailand Business News.

Source link : Private sector cut GDP expectations after COVID-19 impact by National News Bureau of Thailand

According to the Press Release on the Economic and Monetary Conditions for January 2020 (Bank of Thailand), the Thai economy continued on a path of deceleration in January, contracting from the previous month in the value of merchandise exports excluding gold, manufacturing production, private investment indicators, and public spending.

Details of the economic conditions are as follows:

Exports declined 1.3% (excluding gold)

The value of merchandise exports expanded by 3.5 percent from the same period last year.

Excluding gold, exports value growth remained negative at 1.3 percent.

The continued contraction was due to exports of

1) Petroleum-related products such as chemical and petrochemical products, partly due to the slowdown in trading partners’ demand.

2) Agricultural products especially rice as a result of price competition from competing countries and supply affected by the drought.

3) Electronic products which turned into contraction from the high base effect last year. However, exports of electrical appliances and hard disk drive continued to expand thanks to the relocation of production base to Thailand in the previous periods. Also, exports of agro-manufacturing products continued to expand from sugar.

Tourist arrivals expanded 2.5%

The number of foreign tourist arrivals expanded a rate close to the previous month with 2.5 percent, mainly from the expansion in the number of Malaysian Russian and Hong Kong tourists as a result of Chinese lunar new year that came earlier than last year.

However, the number of Chinese tourists contracted due to the announcement of Chinese government to ban on outbound group tour since January 24, 2020 after the outbreak of coronavirus disease 2019 (COVID-19) in China.

Private investment indicators continued to deteriorate from the same period last year

The slowdown in domestic and external demand, the low capacity utilisation rate, and the fragile business sentiment led to the delay in business investment.

This was reflected by the continual contraction of investment in machinery and equipment from domestic machinery sales, and the number of newly registered motor vehicles, as well as import of capital goods which turned into contraction.

In addition, investment in construction contracted from both permitted construction area and construction material sales

Public spending, excluding transfers, continued to contract from both current and capital expenditures

Current expenditures contracted from purchases on goods and services and compensation of civil servants,partly due to the high base effect last year. Capital expenditures of central government continued to contract as a result of…

Source link : Thai economy continued on a decelerating trend in January by Carlos Fuitzer

This year, the country’s economy is facing another big concern from the COVID-19 virus situation. With help from the government’s economic measures, the National Economic and Social Development Board (NESDB) is expecting the Thai economy this year to grow just 1.5-2.5 percent.

Last year, the Thai economy has already suffered from many negative impacts such as the ongoing trade war, national drought disaster, and the appreciating Thai baht, all of which has resulted in only 2.4 percent economic growth.

The NESDB Secretary General Tossaporn Sirisamphan has released the Q4 2019 Thai economic report showing 1.6 percent growth, which is the lowest in 21 quarters. The performance of the final quarter means 2019 economic growth of 2.4 percent overall.

The NESDB cited the global economic slowdown, the U.S.-China trade war, strong Thai currency, budget bill delays, and the drought disaster to be the main affecting factors.

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This year, the NESDB is projecting 1.5-2.5 percent growth, which has been reduced from the previous 2.7-3.7 percent estimate. This is due to the effects of the COVID-19 virus expected to remove at least 150 billion baht’s revenue from the tourism industry, should the situation be under control by March. Drought disaster and government budget delays also play their part.

The slowly recovering global economy and trade is expected to provide a positive push as the U.S.-China trade war is slowly resolving itself, and Brexit concerns are more relaxed. These aspects are expected to help the export sector grow by 1.4 percent.

Internal factors, resulting from the government’s economic measures and investments are expected to help propel the economy, with government investments expected to grow at 3.5 percent, and private investments expected to grow at 3.6 percent. Household consumption is also expected to grow as well.

The post NESDB projects 1.5-2.5 percent growth in 2020 appeared first on Thailand Business News.

Source link : NESDB projects 1.5-2.5 percent growth in 2020 by National News Bureau of Thailand

General Motors (GM) announced it will stop selling Chevrolet vehicles in Thailand and sell its Rayong plant to Great Wall Motors (GWM) by the end of this year.

GM entered Thailand in 2000 with a vehicle assembly plant with an annual production capacity of 180,000 units and a powertrain plant with an annual capacity of 120,000 units — with a combined investment of US$1.4 billion.

The Rayong plant has produced nearly 1.4 million vehicles since it opened in 2000.

China’s leading sport utility vehicle (SUV) and pickup maker Great Wall Motors on Monday said it will purchase General Motors’ Rayong car production facility in Thailand.

Based in the city of Baoding, in the Hebei province, in the north of China, the company Great Wall Motors owns several brands of SUVs and cars like Haval, Great Wall, WEY and ORA. With more than 500 branches abroad, its vehicles are exported to more than 60 countries.

The post GM sells Thai factory to Chinese automaker GWM appeared first on Thailand Business News.

Source link : GM sells Thai factory to Chinese automaker GWM by Zhong Li