Mekong Monitor: Thailand’s economic activity may not return to pre-COVID-19 levels until 2022

Photo Credit: Indochina Pioneer

 

TRADE, ECONOMY, AND INVESTMENT

 

THAILAND

Thailand’s economic activity may not return to pre-COVID-19 levels until 2022
(14 July 2020) Thailand’s central bank, the Bank of Thailand (BOT) said the country’s economic activity is not expected to return to pre-COVID-19 levels until 2022, but the country’s interest rate of 0.5% is unlikely to reach 0%. The BOT forecasts the economy will shrink by a record 8.1% in 2020, although the economy is expected to gradually recover in the second quarter. The central bank has cut its interest policy rate three times this year to 0.5% to cushion the impact of the coronavirus. The BOT will allow more trading of gold and commodities to reduce the impact on the baht.
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THAILAND

Thai mall operator seeking to reach 90% of Vietnam’s provinces in the next five years
(13 July 2020) Thailand’s Central Retail, an arm of Thai retail conglomerate Central Group, seeks to expand to nearly 90% of Vietnam’s provinces in the next five years. The retailer intends to have operations in 55 of Vietnam’s 63 provinces and nationally run cities, up from the current 39. It will open six new GO! Mall locations and convert four Big C supermarkets into malls in Vietnam in 2020. Central Retail currently operates 35 malls and 230 supermarkets, electronics stores and other retailers in Vietnam. Vietnam accounted for 20% of the company’s total revenue in 2019, making it the company’s second-largest market after Thailand.
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MYANMAR

Myanmar’s airports may not open to international commercial flights until October 2020
(13 July 2020) Myanmar’s airports may not open to international commercial flights until October 2020, according to the National Tourism Development Central Committee. Even when its airports reopens, however, it remains to be seen if there would be any takers, other than those who wish to be repatriated from overseas. Domestic flights are currently operating, but are restricted to only Myanmar citizens and foreign residents registered in the country. The government stated that when commercial flights are resumed, they will be restricted to routes serving neighbouring cities in the ASEAN region and later, other Asian countries. Myanmar has banned all international commercial passenger flights since 31 March, with the latest ban to last until 31 July 2020.
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MYANMAR

Myanmar’s garment manufacturing industry’s strong growth expected to continue
(16 July 2020) Fitch Solutions expect Myanmar’s garment manufacturing industry to continue displaying high growth potential, alongside other countries such as Cambodia, Vietnam, and Bangladesh. The research firm based these projections on the fact that Myanmar has relatively low costs of labour, proximity to China, special market privileges granted by the EU under the Generalised Scheme of Preference (GSP), and low logistics and transport costs. However, Fitch warned about the risks of the EU’s withdrawal of the GSP over the ongoing human rights issue in the Rakhine state. Myanmar’s apparel exports grew at a compound annual growth rate of 37% between 2010 and 2019.
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CAMBODIA

An estimated 390,000 job losses projected for Cambodia in 2020
(15 July 2020) The Asian Development Bank (ADB) projected Cambodia will lose some 390,000 losses in 2020 due to the COVID-19 pandemic. On 15 July 2020, ADB approved a US$250 million loan to help the Cambodian government respond to the pandemic. The loan will incur a 1.0% per annum interest rate during an eight-year grace period, and 1.5% thereafter. Besides the loan, the ADB will provide grants as well as technical assistance for its cash transfer programme. The ADB’s financial support is targeted towards businesses, households and individuals that have been adversely affected by the crisis, with emphasis on poor and vulnerable groups.
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