Mekong Monitor: Thailand’s economic growth slips to 5-year low, tourism sector hit hard by virus outbreak
Photo credit: Bangkok Post
TRADE, ECONOMY, AND INVESTMENT
Economic growth slips to 5-year low, tourism sector hit hard by virus outbreak
(17 February 2020) Thailand’s economy grew 2.4% in 2019, the slowest rate since 2014, due to slowing exports and public investments while the impact of the COVID-19 outbreak is expected to exert more pressure in 2020. Southeast Asia’s second-largest economy has been affected by the US-China trade war, soft domestic demand, a delayed fiscal budget and drought. The authorities had hoped the tourism sector would offset the slowdowns in other sectors. The country’s GDP expanded 1.6% during the fourth quarter of 2019 (Q42019) compared to the same period in 2018, lower than the 2.1% forecast in a news poll. According to the National Economic and Social Development Council (NESDC), on a quarterly basis, Thailand’s economy grew 0.2% in Q42019. Thailand’s state planning agency said on 17 February that it has cut forecasts for the 2020 economic growth to 1.5%-2.5% from 2.7%-3.7% and lowered its outlook for exports to 1.4% from 2.3%. The agency also expects foreign tourist numbers to fall to 37 million in 2020 down from 2019’s record of 39.8 million, due to the virus outbreak. The Tourism Authority of Thailand expects a loss in revenue from the fall in tourist numbers to reach as high as US$16 billion.
Vietnam to woo Taiwanese tourists to counter drop in Chinese visitors
(15 February 2020) Vietnam will accelerate plans to diversify its tourism industry by attracting visitors from Taiwan, among other countries, to mitigate the impact of a drop in Chinese tourists due to the COVID-19 outbreak. According to its tourism authorities, the country is expecting no tourist arrivals from China in the next three months, along with a decline in the number of international and domestic travellers by up to 50%-70%. In 2019, Chinese tourists accounted for 32%, or 5.8 million, of total inbound visitors. According to a news outlet, at least 5,000 workers in the travel industry have been laid off in Vietnam’s central province of Khanh Hoa due to the fall in the number of visitors. Vietnam’s tourism sector intends to implement measures to prop up the tourism sector by targeting countries that already have established frequent flights with Vietnam such as Taiwan, South Korea, Japan and ASEAN member countries.
Cambodia’s industrial product exports valued at US$11 billion in 2019
(17 February 2020) Cambodia’s export of industrial products reached US$11.2 billion in 2019, marking a 14% year-on-year increase. A report from the Ministry of Industry and Handicraft showed that the export of garment, footwear and travel goods accounted for 83% of the country’s total industrial product exports, worth US$9.3 billion and increased 11% from 2018. Meanwhile, non-garment exports such as milled rice, white sugar, animal feed, bicycle, beer cans, beer, soft drinks, cigarettes, electronic appliances and so on increased 27% to US$1.8 billion. The total of industrial products produced in 2019 increased 7% to US$14.9 billion, out of which US$3.7 billion worth of goods was produced for the domestic market.
Total border trade value exceeds US$3.9 billion
(16 February 2020) Myanmar’s total border trade from 1 October 2019 to 7 February 2020 of the 2019/2020 fiscal year exceeded US$3.9 billion, according to its Ministry of Commerce. The total border trade increased to US$3.981 billion, up from US$584 million compared with the same period in the previous fiscal year. Out of the total, US$2.57 billion was in exports while US$1.41 billion was in imports. Compared with the 2018/2019 fiscal year, export earnings in the current fiscal year increased by more than US$221 million while import earnings increased by US$362 million. Among all the border points, the Muse border point captured the largest volume and value of border trade, with an estimated value of more than US$1.92 billion in the current fiscal year followed by Hteekhee with $668 million and Myawady with $390 million. Myanmar’s major export items include farm, animal, marine, forest, mining and other products. The country mainly imports capital goods, industrial raw materials, and personal goods.
Vietnam-based South Korean manufacturer flies electronic components from China to Vietnam
(18 February 2020) South Korean smartphone maker Samsung has resorted to flying in electronic components for its smartphones from China to its factories in Vietnam to address the disruption in supply chains caused by the COVID-19 outbreak. Samsung produces nearly two-thirds of its phones, including its latest range, at factories in Vietnam’s Bac Ninh and Thai Nguyen provinces. It recently unveiled its latest foldable smartphone and Galaxy S20 5G range on 11 February 2020. The COVID-19 outbreak has left Vietnam’s local and foreign-owned manufacturers in areas ranging from electronics to textiles and footwear in a vulnerable position because many have supply chains that rely on China. The vice-chairman of the Korea Chamber of Business in Vietnam said many South Korean manufacturers carry inventory of only two to four weeks at their Vietnamese manufacturing sites. As such, many manufacturers are concerned that if the parts are not enough, they would not be able to make the final product.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.