Thai finance minister says economic fundamentals remain solid amid pandemic

THAILAND - BANGKOK. Thailand's economic fundamentals and fiscal position remain strong, the finance minister said on Wednesday, despite the fallout of the coronavirus pandemic on the tourism-reliant country.

Southeast Asia's second-largest economy shrank 12.2% in the second quarter from a year earlier, the sharpest drop since the 1998 Asian financial crisis.

Despite the unfavourable climate, Thailand's economic fundamentals remain solid on both the internal and external fronts, making Thailand one of the most resilient economies in the region, Predee Daochai told a business seminar.

"We believe that the worst is behind us. The economy is projected to bottom out in the second half of this year and would pick up in 2021 with 4%-5%" growth, he said.

The finance ministry has forecast a record economic contraction of 8.5% this year.

Thailand will carry out necessary economic and health-care policies to sustain the level of economic growth and activities, Predee said. "We have to brace and prepare ourselves for any unforeseeable risks".

The government will continue to support vulnerable groups, and promote job creation as well as focusing on large-scale investment projects for long-term competitiveness, he said.

In response to the pandemic-induced recession, the government has launched relief and stimulus measures worth about 2.2 trillion baht ($70.22 billion), or 12% of gross domestic product (GDP), to help households and businesses affected by the outbreak, Predee said.

That includes a 1.9 trillion baht package comprising 1 trillion baht borrowing and 900 billion baht in soft loans.

"Despite record government stimulus packages, Thailand’s fiscal position remains healthy," Predee said, adding the country's public debt to GDP was still below 60%.

With budget limitations, the government may seek borrowing if necessary, he said. "It is of importance to pursue economic measures without sacrificing our fiscal integrity".