BoT: New wave less of a hit
Consumption dip lower than in 2020
published : 26 Feb 2021 at 04:09
newspaper section: Business
writer: Somruedi Banchongduang
Thailand's economic conditions last month were affected by the new round of Covid-19, with the pace of economic recovery becoming more uneven, though the impact was smaller than the first wave, says the Bank of Thailand.
Several economic indicators in January dropped compared with the corresponding period last year and the previous month, with private consumption stumbling to a 4.9% year-on-year decline from 2.9% growth in December, and a 1.5% increase in the fourth quarter, said Chayawadee Chai-Anant, senior director of the economic and policy department.
A decline in private consumption was attributed to the dip in all spending categories as a result of the deterioration in consumer confidence and household purchasing power. These were linked to virus containment measures strictly implemented in some areas, said Ms Chayawadee.
"Factors supporting household purchasing power, including employment, income and confidence were affected. Economic activities shrank, especially in the areas where containment measures were strictly implemented," she said.
The impact of the recent outbreak on private consumption was limited compared with the first outbreak, said Ms Chayawadee.
She said the latest outbreak contributed to higher unemployment registration with the Social Security Office, rising 3.4% in January month-on-month.
The central bank's survey found the income of vendors declined by 50% because of the new infections, while the income of taxi drivers plummeted by 60-90% and spa and massage parlour workers by 50-90%.
The number of foreign tourist arrivals continued to severely contract by 99.8% year-on-year in January as travel restrictions remained in place.
"Coupled with the new outbreak in Thailand, foreign tourist arrivals remained muted, although the government gradually relaxed some travel restriction measures in the preceding period," said Ms Chayawadee.
She said exports and government spending are key factors supporting the country's economic growth momentum this year.
The value of merchandise exports slightly contracted by 0.3% year-on-year last month. Excluding gold exports, which contracted because of a high base effect last year, Thai export value expanded by 5.5% month-on-month, in line with demand from trading partners and a recovery in the global electronics cycle.
Public spending, excluding transfers, continued to expand year-on-year. Current expenditures posted growth from purchases of goods and services, while the government's financial remedy schemes also supported people's purchasing power.
"The impact of the new outbreak on the economy was less severe than the first outbreak last year," said Ms Chayawadee.