Quarterly figures hit record trough
State spending the only factor supporting the economy
published : 30 May 2020 at 04:00
newspaper section: Business
writer: Somruedi Banchongduang
The economy got off to a grim start this quarter, with several economic indicators posting the worst levels on record for an April, says a central bank senior official.
With an inbound travel ban adopted to contain the coronavirus outbreak, no foreign tourists arrived in April, said Don Nakornthab, senior director of the economics and policy department.
From January to April, there were 6.69 million international arrivals, a decline of 52.2% year-on-year.
Tourism-related businesses, especially hotels, restaurants and passenger transport, bore the brunt.
Zero foreign tourists arrived in May as well, Mr Don said.
The value of merchandise exports in April contracted by 3.3% versus the same period last year. Stripping out the historical value of shipped gold, export value shrank 15.9% from a year earlier due to the sharp decline in demand from trade counterparts dented by global lockdown policies.
Exports of automotive and parts slid 49% in April to a record low.
"Thailand's export contraction is expected to deepen over the next 1-2 months, crippled by the tepid global demand because of the outbreak," Mr Don said.
Given that import value slumped 17% year-on-year in April, Thailand's current account turned to a deficit of US$700,000. The country still recorded a current account surplus of $8.9 billion for the four months to April.
Private consumption dipped 15.1% year-on-year in April, marking a record low. The contraction seen across spending categories resulted from the rising employment rate, lower income and weak consumer confidence, coupled with the postponement of Songkran and lockdown measures.
In April, consumer confidence and business sentiment indices also recorded all-time lows.
With the government's 5,000-baht handout to those who lost jobs due to the pandemic, domestic consumption is expected to improve a bit in May, albeit still reeling in contraction.
The labour market is worrisome because the number of jobless and lay-off claims spiked for those under the Social Security Fund's Section 33, Mr Don said.
The number of firms registered for temporary business suspension under Section 75 increased dramatically to 2,406 in April from 445 the previous month, while that of employees under the section surged to 465,218 from 96,264.
Under Section 75 of the Labour Protection Act, an employer is entitled to temporarily cease operations, during which time they must pay employees at least 75% of their regular working-day wages. The government's easing of the lockdown should help improve the jobless rate.
"Several key economic data contracted to record-low levels in April because of the pandemic," Mr Don said. "However, government spending was the only factor supporting the economy."
Public expenditure excluding transfers continued to expand 28.9% in April from the same period last year. Current expenditure grew from purchases of goods and services.