Kasikorn Research Center (K-Research) predicts at least 100,000 job losses this year and another 30,000 next year, dampened by an export slump, tepid economic growth and drought.
Based on preliminary estimates, around 70,000 people lost their jobs in the manufacturing sector for the 10 months through October, and 30,000 more job losses are expected in the final two months of the year, said Kevalin Wangpichayasuk, assistant managing director of K-Research.
The number of job losses would exceed 100,000 this year if the service and agricultural sectors are taken into account, she said.
The job reduction in the manufacturing sector could be attributed to the country's export contraction, lowering capacity utilisation.
Moreover, the baht's strength against the dollar has weakened the competitiveness of local businesses.
The firmer baht affects not only the export sector, but also reduces manufacturing output and leads to job losses, said the firm.
While a daily minimum wage hike of 5 baht, starting from Jan 1, 2020, will have limited impact on inflation, it will add 0.3% to the average labour cost, said Ms Kevalin.
The farming sector will be overwhelmed by the baht's appreciation, minimum wage hike and drought, so the government needs to pass measures to take care of this sector, she said.
Ms Kevalin said drought is expected to become more severe in 2020 than this year, with low water levels in many dams and employment in the farming sector impacted.
"With the negative factors, 30,000 more job losses are expected next year in the initial forecast. But the drought situation needs further monitoring in the first 3-4 months of 2020 for clarity," she said.
K-Research predicts the local currency will climb higher, past 30 to the dollar.
The firmer baht is expected in the first quarter next year because of the weakening dollar, assuming a US Federal Reserve policy rate cut and the baht continuing to rise on movement from both directions for the remainder of next year.
Another assistant managing director, Nattaporn Triratanasirikul, said the research house maintains 2020 Thai GDP growth of 2.7%, expecting public spending as a driver.
Government investment will grow significantly by 6.9% next year, she said, assuming passage of a draft bill on budget expenditure for fiscal 2020 and accelerated disbursement.
Ms Nattaporn said domestic political uncertainty could delay the budget disbursement process, which will dent private sector confidence, causing economic growth of only 2.5%, the lower end of K-Research's projection of 2.5-3% for 2020.
The country's exports should improve, but will still contract 1% next year, she said.
With challenges from export contraction, the baht's rise and the daily minimum wage increase, three business sectors -- exports, agriculture and small and medium-sized enterprises -- are expected to be dealt the hardest blows.