Exporters warn the government that logistics needed for shipping in Eastern provinces must be maintained up and running as they report an upside in demand in some sectors of key export markets because of the severe Covid-19 lockdowns which have kept people in western countries housebound with more working from home.
The Covid 19 Centre for Economic Situation Administration is understood to be meeting to discuss a new subsidy scheme for household utility bills as a result of Tuesday’s cabinet meeting and a call from the Prime Minister to Deputy Prime Minister Supattanapong Punmeechaow and the Finance Minister, Arkhom Termpittayapaisith to prepare supports for the public as Thai authorities take smart measures to fight the virus which may yet cause economic hardship.
The Thai cabinet approved in principle on Tuesday moves to ease the burden on an estimated 40 million ordinary people who are impacted by the current Covid 19 virus surge.
The government’s response to this virus emergency has so far fallen short of the heavy-handed lockdown ordered last year and officials are hoping that a more targeted, smarter approach this time around may be possible based on knowledge gleaned from 2020.
Move to introduce utility bill subsidies as PM declares that money must be found to ease hardship
The main upshot of Tuesday’s cabinet meeting may well be the limited reintroduction of subsidies for home utility bills which last year were a significant benefit for those struggling to get by.
On Monday, before the cabinet meeting, Prime Minister Prayut Chan ocha said it was imperative to provide support to people and businesses, at this time, as Thailand also brings forward its vaccination programme.
‘If we can’t find the funding, it will be over,’ he declared.
Debt repayment holiday still in place
The Prime Minister also responded to calls from business interests particularly in the tourism sector who have called for a new package of debt repayment facilities by saying that the current holiday on debt repayments had yet to expire.
General Prayut said that what we have seen is some borrowers resume payments after talks with their banks.
At the cabinet meeting on Tuesday, the Prime Minister called on Deputy Prime Minister and Minister of Energy, Supattanapong Punmeechaow, the government’s economic coordinator and the Finance Minister, Arkhom Termpittayapaisith, to consult with the country’s National Economic and Social Development Council to devise new plans to support the most vulnerable.
฿400 billion of ฿1 trillion loan tranche still in reserve
It is being reported that the government still has access to approximately ฿400 billion from the ฿1 trillion approved and put in place last year to assist the country as it struggles with the pandemic.
It is thought the new package of measures are unlikely to include cash handouts which, last year, became somewhat controversial and which hopefully will not be needed in 2021 as no full scale lockdown of business or industry is being proposed as of now.
Exporters emphasise that logistic operations in the Eastern provinces must be kept running
Nevertheless, business interests and Thailand’s exporters are already reporting problems with the current Covid 19 outbreak.
On Tuesday, Kanyapak Tantipipattanapong, of the Thai National Shippers Council warned that, already, lockdown measures were impacting logistics as exporters strive to ship goods out of the kingdom.
She particularly feared for the Eastern provinces, a key industrial and export hub as well as one of the areas hardest hit by this outbreak.
‘The government should take care of the transport sector if it has to impose lockdown measures in the East of the country,’ she said.
Beneficial effects as demands from western countries rise for food, health and consumer products
On a positive note, however, exporters in Thailand are reporting that the lockdown in western countries and worldwide is proving beneficial to some export sectors in Thailand with more demand for food, consumer products and medical sector supplies.
This is because of more people staying at home and even working from home.
Electricity bill subsidies
It is understood that, as result of Tuesday’s cabinet meeting, one of the main issues to be discussed by the Centre for Economic Situation Administration will be subsidies towards electricity bills for Thai families and households over the coming months.
Cabinet also discussed the 2021/2022 budget
At Tuesday‘s cabinet meeting, discussions also focused on the budget for 2022 which comes into effect on the 1st October 2021 which is the beginning of the administrative year for Thailand.
The budget for next year, significantly, will be reduced by 5.66% coming in at ฿3.1 trillion. The government has also had to provide for debt repayment of ฿100 billion which will now account for 3.2% of the budget.
Tax revenue is currently projected for the year 2021/2022 at only ฿2.4 trillion leaving the kingdom with a ฿700 billion deficit or 4.04% of projected GDP which is still quite healthy and positive compared to western countries.
For example, the UK has projected a budget deficit of up to 19% of GDP in the coming years.
Thailand has a debt to GDP of 50.4%
In overall terms, Thailand is projected to have ended 2020 with a public debt of 50.54 % of GDP while the United Kingdom in the coming two years is projecting a public debt in the order of 109%.
The current government projection is for growth of 3 to 4% in 2021//2022 with controlled inflation of between 0.7% and 1.17%.