Support Measures
for Economic Recovery
3 August 2020
Charl Kengchon
Kasikorn Research
It may not be until 2022 that economic activity can return to pre-covid19 levels
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-8.1%
5%
5%
5%
3%
3%
3%
3% The gap between Old and New Normal GDP in 2023 might be as large as 0.7-1.4 trillion baht (in real terms)
-10% 1.4%
5.1%
3.7%
#1.
% of Total Loans
Debts under relief measures, because of their size, could have material impact on Thai banks’ capital
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People Businesses
Not in the tax system In the tax system Nano/ SMEs Exports
Construction Sector
Property Tourism/Retail
- Assistance to the low-income group
- Subsidies for public utilities
- Income tax deduction to stimulate domestic spending
- Temporary reduction in VAT for items in the basket of consumer goods and services
- Low interest rate loans for working capital and job retention
- FX policy realignment to make the Baht more competitive
- Jump start in the public sector’s investment and spending via provincial administrative bodies
- Transfer and mortgage fee reductions covering residential property with value up to 5 mil Baht, up from 3 mil at present
- Reduction in the specific business tax from the current rate of 3.3%
- Extension of domestic tourism measures set to expire in October
- Temporary reduction in VAT for restaurants, hotels, shopping malls
The authorities may have to make tough decisions on stimulus measures
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#2.
5
41.2%
52.1%
58.7%
62.9%
66.5%
69.5%
72.4%
40%
45%
50%
55%
60%
65%
70%
75%
80%
2562 2563 2564 2565 2566 2567 2568
Thai Public Debt to GDP (%)
There will always be a price to pay for stimulus measures
Current Fiscal Sustainability Framework
2019 2020 2021 2022 2023 2024 2025
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Deglobalization
Pandemic and Fear
Technology Changes
Labor and Demographics
Other Competitiveness Issues
Thailand must prepare for a new global trade landscape
#3.
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Source: UNCTAD
Before the pandemic, Thailand was already trailing key competitors in attracting FDI
USD has fallen against THB but gained against VND, IDR, CNY
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Business consolidation, M&A
Industries with local supply chains, addressing public health or environmental issues, such as foods & agro, healthcare & medical, bio-circular-green economy
Investment Opportunities #4.
Thank You
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