The Celebration of New Year 2019 is still bright in my memory but in February, at the beginning of the Rat Year, the epidemic continues to grow. Thailand not only has good economic development potential but also faces five key challenges as follows:
1. Covid19: Nearly 1 million Chinese tourists disappeared every month which affected tourism industry in Thailand. If the epidemic continues for 3 months, GDP of Thailand will decrease 0.5%
2. Export: Many factors such as stronger baht currency will affect trading. Global economic weakening affect the decrease of Thai export value when compared year on year.
3. Drought: Drought in 60 years began last year which has direct effect on basic industry of Thailand – agriculture. Now some area has cleared up and hope that this year Rainy season’s will not be delayed.
4. Smog: The smog in Thailand has only become apparent in the past 2-3 years. Although PM2.5 has been serious for a few days, tourists will decrease when there is smog around. Thai people still stay home, do not go out to travel, eat, it also increases the cost of medical care which effect on economy.
5. Budget: Budget for 2019, which has been reviewed and approved, is uncertain because disclosure of selected members of Parliament’s alternative voting incident. This is the biggest test that Thai economy face. The unapproved budget mean that the government cannot use the money. Many government-led projects are unable to continue. Government employees’ salaries are also difficult to pay. It may be “government shutdown” like US crisis.
The Corona Virus outbreak will eventually pass and the drought will be resolved. When it comes to rainy season, the depreciation trend of the baht over the past half month, it has gradually reserved. Unfavourable export no matter the fiscal budget will approve or not. The basis of Thai economy is good and we believe that Thailand can solve budget problem and will not develop into major crisis.
Thai government and most people are well aware of the economic challenges and have strong sense of urgency to get out of the situation faster. They are more interested in attracting foreign investment, welcome foreign investors, provide opportunities for foreign investors to set up a business in Thailand more conveniently, and provide investment privileges. Under the current global economic situation, Thailand also has many industrial structure opportunities waiting for foreign investors to invest. This is a great opportunity to invest in Thailand.
Remark: Information and opinion is for reference only!