NESDC frets over second outbreak contingencies
The government think-tank, National Economic and Social Development Council (NESDC), has expressed mounting concerns about a possible second wave of infections, saying the renewed outbreak will stall recovering domestic tourism and the overall economy.
Danucha Pichayanan, secretary-general of the NESDC, said with new cases reported in some tourism-dependent provinces, the agency is afraid the spread will affect domestic tourism in provinces that are recovering.
Mr Danucha said after new cases were reported in Chiang Mai and Chiang Rai, visitors had cancelled their bookings for hotel rooms and other accommodation.
"Containing the spread is a priority for the government," he said.
"Effective controls for the second wave are crucial for the country's overall economic recovery."
According to Mr Danucha, the economy hit the lowest level in the second quarter and the economic recovery pace is faster than the projection.
On Nov 16, the NESDC reported GDP contracted by 6.4% year-on-year in the third quarter, much improved from -12.1% in the second quarter, the biggest decline since the Asian financial crisis of the late 1990s.
The first-quarter GDP saw a 2% year-on-year decline as the pandemic started to take its toll on global business activity.
The state planning unit upgraded its full-year economic forecast to a 6% contraction on the same day from a 7.5% decrease on Aug 17.
For 2021, the state think-tank forecasts the economy will expand 3.5-4.5%, mainly supported by improvement in domestic demand, global economic recovery and improved global trade.
Other factors supporting the positive outlook include the fiscal budget disbursement, economic stimulus measures and a low base from this year.
"[Apart from the NESDC] any institutes taking a positive look for Thai economic prospects stem largely from confidence that the first lot of vaccines will be made available by mid-2021," he said.
"That is not a certainty. Everything is uncertain. The government and the NESDC need to monitor all variables."
According to Mr Danucha, other areas of concern are rising unemployment, higher household debt and the baht's appreciation.
He said it is highly likely that the unemployment rate will spike because of the country's overall unfavourable economy.
The NESDC reported in the third quarter average working hours per week declined to 41.6 hours per week from 43.3 hours per week.
The number of overtime workers or those who work more than 50 hours per week declined by 19.7% from the third quarter of last year, which consequently resulted in a decrease in the productivity and income.
This would further affect the purchasing power of households, Mr Danucha said.