Representatives of the private sector, namely the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), said the economy will likely go into a recession this year. However, the JSCCIB said it will not make any predictions until it can see the effects of a recently passed 1.9 trillion baht economic relief package.
The Cabinet announced on Tuesday that the government will use 80-100 billion baht from its fiscal budget, plus 900 billion baht worth of soft loans from the Bank of Thailand (BOT), and an emergency loan decree worth 1 trillion baht, to counter the impact of the coronavirus outbreak on individuals and businesses.
The BOT’s latest prediction, which came before the announcement of the third package, said that the economy will go into a recession of 5.3 per cent in 2020, based on the assumption that exports will contract by 8 per cent.
The JSCCIB said exports could contract between 5-10 per cent. But as the government continues to pour out supportive measures for both employees and businesses, the committee has chosen to wait and see how the measures will affect the economy first before making any new predictions.
The committee is expected to meet again in May.
“Upon looking at the economic indicators, all of them are down from exports, tourism, and investment so the GDP will definitely be negative this year,” said Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI) and the current chairman of JSCCIB.
The committee is consists of FTI, the Thai Chamber of Commerce, and the Thai Bankers Association.
“We want to wait and see how the government measures will affect the economy first before we say how severe the recession will be,” he added.
Recommendations
The JSCCIB’s recommendations for the government to further help workers, employees, and businesses in the coming months include:
- Include the services sector. The government is now paying 62 per cent of wages for employees that are registered within the social security system for up to three months. This, however, does not include employees from the services sector.
- Lower the electric bill by 5 per cent nationwide as the cost of oil has declined by more than half since the beginning of the year. They want the variable tariff (FT) level to “reflect the reality,” they said.
- For the government to increase liquidity into the business sector with more soft loan policies at an interest rate of 2 per cent, while increasing Thai Credit Guarantee Corporation’s loan from 40 to 80 per cent.
- Allow the private sector to deduct three times its expenses on costs to prevent the spread of the coronavirus.
- Set aside a budget for job creation and the promotion of products from domestic producers (Made-in-Thailand) at suitable prices, especially for products that can help prevent the spread of the coronavirus.
- Change the regulations of compensation for employees that are registered within the social security system where “leave-without-pay” employees should not be allowed to receive the 5,000 baht per month hand-outs from the government.
- Allow hourly employment to avoid more people being let go from their job with a minimum wage of 325 baht per day at 40-41 baht per hour and no less than four hours of employment and no more than eight hours per day.
- Reduce employer contribution rates from 4 per cent down to 1 per cent equal to the insurers under Section 33 of the Ministry of Labour’s regulations.
- Provide more compensation for employees with wages lower than 15,000 baht per month to continue to receive 75 per cent of their wages. The Social Security Office will pay 50 per cent and businesses pay the remaining 25 per cent.
- Allow businesses to use its expenses on wages during the outbreak for a tax deduction of up to three times its expenses.
- Have a nationwide standard for curfew to prevent any further disruption on the logistics side of things as each province seems to have their own interpretation of the SOE orders.
