Contribution of SMEs to GDP to drop

Contribution of SMEs to GDP to drop

A vendor at Bangkok's Pratunam market sits idly during the third wave of Covid-19. (Photo: Somchai Poomlard)
A vendor at Bangkok's Pratunam market sits idly during the third wave of Covid-19. (Photo: Somchai Poomlard)

Small and medium-sized enterprises (SMEs) contribution to the gross domestic product (GDP) is expected to drop in the second quarter because of the harsh impact of new infections, which began in April.

Veerapong Malai, director-general of the Office of Small and Medium Enterprises Promotion (Osmep) said the agency has forecast the contribution of SMEs towards GDP to fall in the second quarter from 35% of GDP in the first quarter of this year.

However, the percentage of decrease for the second quarter is not available.

The pandemic was blamed for SMEs' contribution towards GDP falling to 32% in the second quarter of 2020 before recovering to 34.5% in the fourth quarter last year.

The agency reported the information at a meeting of the Committee on Small and Medium Enterprises Promotion yesterday, chaired by Prime Minister Prayut Chan-o-cha.

Thailand has about 3 million SMEs and startups, including community enterprises. Tourism SMEs make up half of the total nationwide.

Mr Veerapong said the agency is in the process of estimating the impact of the third wave of Covid-19 on SMEs and waiting for data about Thai economic performance in the second quarter by the National Economic and Social Development Council (NESDC), scheduled to be announced on Aug 16.

Previously, the government had set a lofty goal to raise the contribution of SMEs to 50% of Thai GDP under the country's 13th national social and economic development plan (2022-26).

According to the plan, the government aims to have Thai SMEs play an important role in generating income for the Thai economy like in developed countries such as Germany, France, Italy and Japan, where SMEs are a crucial engine for generating income.

At the end of the country's 12th national economic and social development plan (2016-21), the government aimed to have SMEs contribute 45% to the country's GDP.

SMEs contributed 36% to the GDP in 2018 before dropping to 35% in 2019.

Mr Veerapong said the agency also reported on the results of SMEs' ability to access the state procurements yesterday.

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