Thai equities hit one-month low as fears rise over economy
08:28, 28 June 2021
Thailand’s benchmark SET 50 Index is set to close lower for an eighth session in a row at a one-month low, following its central bank’s remark about the country’s slow economic recovery.
The central bank said on Monday (28 June) that Thailand’s economy is expected to reach levels seen before the pandemic only in the first quarter of 2023.
Recovery in Thailand’s cash-cow tourism sector has been curbed by resurgent COVID-19 infections. Health authorities announced on Monday that daily new infections are currently near record-high levels.
COVID curbs
On Sunday, the government announced fresh restrictions, which include restaurant dine-in bans and shopping mall curfews, in Bangkok and five surrounding provinces.
Checkpoints will also be set up in Thailand’s southernmost provinces of Narathiwat, Pattani, Yala and Songkhla. Travellers must carry a “letter of intent” to leave or enter.
The Bank of Thailand (BOT) is keeping monetary policy loose in the face of the negative economic outlook. Last week the BOT kept the benchmark one-day repurchase rate at 0.50% for a ninth straight meeting.
Lower growth
The central bank also scaled-back its growth forecast for 2021 to 1.8% from 3%.
Bank of Thailand governor Sethaput Suthiwartnarueput told Bloomberg TV last week that “recovery will be slow and uneven” with services having been hit a lot harder than manufacturing.
Thailand is attempting to reverse the hit to its tourism sector by welcoming at Phuket, from Thursday (31 June), fully vaccinated international guests, who do not have to undertake quarantine requirements on arrival.
Phuket Sandbox
The government hopes the “Phuket Sandbox” will be a stepping stone to a wider opening of Southeast Asia’s second-largest economy to travellers by its peak tourist season, which starts in November. However, the Tourist Authority of Thailand is already downscaling its projected visitor numbers.