Thailand To Go Into Another Lockdown, Economy Expected To Struggle

The imposition of more lockdowns in Thailand is is expected to deteriorate Analysts say the nation’s record unemployment and household debt rates. The nation is planning to shut down its capital city for at least two weeks starting Monday as it battles to contain a new outbreak of the coronavirus.

As of this week, shopping malls, coffee shops, retail stores, massage parlors and other establishments will be closed larger in Bangkok. The city accounts for about 50% of Thailand’s gross domestic product.

The government has imposed new mandatory work-from-home regulations for all government and corporate employees. A citywide night-time curfew will also be in effect and all non-essential domestic travel will be banned.

Analysts say the measures will negatively affect restaurants, airlines and retailers already reeling from restrictions previously imposed over the past two years.

“The economic impact will get bigger and bigger with each shutdown even if the length of the lockdown is the same. This is because many companies are nearing the end of the belt buckle after so many months of declining revenue and high cost of existence,” said analysts at Maybank Kim Eng Securities Thailand.

Thailand has decided to close its borders and tighten restrictions due to the recent spread of the more contagious delta variant. The wave of new cases also makes Prime Minister Prayuth Chan-Ocha’s goal to reopen the country to vaccinated tourists.

Analysts expect household and business income to fall. Economists at DBS Bank said downside risks to Thailand’s growth forecast remained high due to the application of more restrictions.

Prior to the announcement, Thailand’s central bank said a prolonged outbreak would significantly affect corporate liquidity and employment. The bank said it does not expect the country’s economy to return to pre-Covid levels at least until 2023.

On Monday, the Bank of Thailand lowered its forecast for gross domestic product for 2021. The bank said it would closely monitor the economy during the new restrictions to see if it can whether additional support measures should be taken.

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