Lockdown to impact domestic tourism and private consumption
The atmosphere in Siam Square in Bangkok, where business remains bleak as people avoid public spaces.
The government’s lockdown ordinance and tighter controls will mainly affect personal consumption and domestic tourism, says Amonthep Chawla, research director at CIMB Thai Bank (CIMBT).
Private consumption is likely to slow further in July and in the third quarter compared to the previous quarter.
As people are expected to stop their travel across the provinces, it will affect local tourism throughout the third quarter, he said.
However, financial policies are still needed to help vulnerable people under the lockdown measures, said Mr Amonthep.
The central bank needs to accelerate liquidity support for small and medium-sized businesses through the revised soft lending program while a monetary policy rate cut is also required, he said.
“The central bank’s monetary policy committee should hold an emergency meeting to consider a rate cut, which would help ease the financial burden on borrowers,” Amonthep said.
However, recent government actions are unlikely to impact manufacturing and Thai exports during the global economic recovery, CIMBT said.
Even with rising exports, the Thai economy is at downside risk from higher daily infections and delayed adoption of vaccinations, he said.
Mr Amonthep said if the government fails to contain new infections and extends the lock-up period, CIMBT will cut the country’s economic growth forecast again for this year and it could be below 1% from the existing 1.3% estimate.