Q1 jobless rate at 12-year high amid virus outbreaks

Q1 jobless rate at 12-year high amid virus outbreaks

Benchmark interest rate will likely stay at record low of 0.5% for 1-2 years

The entrance of a closed hotel is seen near the beach in Phuket, March 31, 2021. (Reuters file photo)
The entrance of a closed hotel is seen near the beach in Phuket, March 31, 2021. (Reuters file photo)

Thailand's unemployment rate hit a 12-year high in the first quarter of 2021 due to the renewed impact of coronavirus outbreaks, the state planning agency said on Monday.

The latest, more severe outbreak has seen overall cases nearly quadruple since early April, and deaths increase six-fold.

The unemployment rate was 1.96% in the January-March quarter, representing 758,000 workers without jobs, up from 1.86% in the previous quarter, state agency data showed.

The rate was the highest since 2.08% recorded in the first quarter of 2009 during the global financial crisis.

"The unemployment rate increased drastically and is expected to rise again, reflecting the ongoing impact of Covid-19," Danucha Pichayanan, head of the National Economic and Social Development Council (NESDC), told a briefing.

Unemployment slowed in the second half of 2020, when earlier outbreaks were contained before re-emerging this year.

The official definition of being unemployed in Thailand is quite narrow, including only those who do not work a single hour in a surveyed week and excluding those with a business or owning farms, while analysts note it does not catch the significant unofficial economy.

The prolonged Covid-19 outbreak may prevent the economy from growing as targeted as economic activity has slowed, Mr Danucha said.

Last week, the NESDC cut its 2021 economic growth outlook to 1.5%-2.5% from 2.5%-3.5%, predicting only half a million foreign tourists after the new wave of virus cases. Thailand had nearly 40 million visitors in 2019.

The outbreak will delay a recovery in tourism, affecting more than 7 million tourism workers, Mr Danucha said.

However, the number of employed workers reached 37.6 million in the March quarter, up 0.4% from a year ago due to higher employment in the agricultural sector, which has absorbed some of the workers laid off in other sectors since 2020. 

Meanwhile, Thailand's benchmark interest rate will probably stay at a record low of 0.5% for one or two years until the economy clearly recovers, a senior central bank official said on Monday.

Inflation may rise temporarily and stagflation is not expected, senior director Don Nakornthab told an economic forum.

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