Mr Sethaput said the assumptions around the impact of COVID-19 have changed, leading to the need for new measures and policy implementations to curb the country’s economic doldrums.
In the initial stage of the novel coronavirus outbreak, it was thought the impact would be severe but also swift and not so long-lasting. As a result, economic measures to deal with the repercussions initially focused on blanket initiatives, including cash injections and freezing debt repayments.
Such assumptions have now changed as all parties now agree the COVID-19 pandemic will have a long-term impact.
“It is expected to take at least two years before the Thai economy returns to its pre-pandemic levels in terms of GDP,” Mr Sethaput said in a meeting with some local media editors.
As a result, measures to handle the situation have been changed and a more selective approach adopted, with a focus on debt restructuring, he said.
The central bank governor also warned that recovery may come at a cost.
“Even when the economy is fully recovered, things are unlikely to be the same. There is a risk that more inequality in the country will be seen,” he noted.
The COVID-19 pandemic has caused an immense strain on domestic businesses, particularly the tourism sector, and resulted in high unemployment which means household debts could skyrocket. Small and medium-sized enterprises have also suffered.
Several large corporations, the lucky ones, will survive due to their financial strength, despite the tough times ahead.
Mr Sethaput said the number of foreign visitors projected for 2021 is only 8-9 million, a drastic drop from last year’s 40 million.
The government has made an effort to boost local tourism, but the central bank governor said revenues from foreign tourists accounted for about 11 to 12% of Thailand’s GDP. In 2019, each foreign visitor spent nine days and B50,000 on average per trip.
If the country wants local tourism to fully compensate for the lost revenue from foreign visitors, each local tourist would need to spend 20 days and B200,000 per trip.
There are promising signs that exports have improved, Mr Sethaput said, although this has not relieved unemployment. While petrochemical, electronics and automobile industry exports account for 49% of the country’s total exports, employment across the three industries accounts for just 4% of total jobs.