COVID-19 disrupts development progress in Thailand: UN report

A UN report highlights the disruption from the pandemic on Thailand’s progress in reaching the Sustainable Development Goals: success will depend on the policies implemented now - during the crisis. This preliminary report highlights that Thailand’s GDP will be 5 per cent lower in 2025 than if the COVID-19 pandemic had not occurred.

The COVID-19 Economic Impact Assessment for Thailand suggests that unemployment among women would rise to 4.5 per cent, while unemployment in the general population would hit 3.1 per cent in 2020. Seasonal peaks will be higher, particularly among informal workers. The automotive and tourism sectors are expected to see sharp downturns, while agricultural production already suffering from the draught will further be affected by the pandemic. Other sectors of the economy such as healthcare, consumer goods and financial services appear to be less affected and Thailand’s prompt stimulus measures have already offset some of the effects of the pandemic. 

Gita Sabharwal, the United Nations Resident Coordinator in Thailand, said the pandemic could disrupt key efforts in achieving the Sustainable Development Goals and undermine progress made over the past few years. 

“COVID-19 is an unprecedented global health crisis, which is having major economic and social impacts in Thailand,” Ms. Sabharwal said. “Thailand’s fiscal stimulus packages focus on helping vulnerable people, while maintaining the health of economy through supporting businesses and creating jobs. However, one aspect that Thailand should consider including within the future policy is the environment as the performance and resilience of the Thai economy depend on the health of the natural environment and ecosystems. The UN system will continue to support Thailand in safeguarding progress towards the Sustainable Development Goals and guiding the long-term resilient road to recovery.” 

The report recognized the government’s quick response to the pandemic but said its stimulus package, which currently accounts for 15 per cent of GDP and is on par with other countries, needs to go further, particularly in refining the mix of measures in the stimulus package. The report advises that, in supporting GDP and employment, government consumption expenditure is likely to be the most effective measure, followed by cash handouts and direct support to the worst-off;  loans, liquidity schemes and tax cuts and deferrals for business; and interest rate cuts by the Bank of Thailand. 

Professor Dr. Thosaporn Sirisumphand, Secretary General of the National Economic and Social Development Council (NESDC), stated that given the short-term and long-term repercussions of the COVID-19 outbreak on the Thai economy and society, the government prioritizes the assessment of the pandemic’s impact—an area that the NESDC has promptly responded through conducting initial analysis and surveys. “We thus support the UN’s work as a partner in this assessment, and the results will serve as an important input for policy delivery to secure Thailand’s sustainable recovery.”

The UNDP Resident Representative in Thailand, Renaud Meyer, said COVID-19 had impacted the country’s vulnerable populations the most.

“COVID hit the most vulnerable people the hardest, further highlighting existing inequalities,” Mr. Meyer said. “Vulnerable populations, such as people with disabilities, LGBTI and ethnic community members are severely affected. Women will be at higher risk of unemployment, as many are employed in worst-hit sectors such as tourism,” Mr. Meyer said. “Informal workers account for more than half of the labour force and they are also strongly impacted, as they do not qualify for social security or entitlements at workplaces, such as wage subsidies, paid leave or sick leave. This calls for well-targeted recovery measures.”

The UNICEF Representative for Thailand, Thomas Davin, said vulnerable families needed particular attention during the recovery period.

“As important as it is to ensure that businesses survive and succeed in this difficult time, it is equally important to make sure that vulnerable families, including those working in the informal sector are receiving direct support. Policy responses should also put in place forward-looking and long-term measures to strengthen social protection systems, so that no one will ever have to worry if they can put food on the table at the end of month.”

“There should also be further investment in human capital to upskill workforce, starting with young people. This will define the future success of Thailand’s economy.” Mr. Davin said. 

Further analysis will provide an in-depth view of the social impact of the pandemic on poverty, food and nutrition, health, education, social protection, and protection from violence and abuse. The UN Thailand, in partnership with the National Economic and Social Development Council plans to release the findings in July 2020.

This is part of the series of the impact assessments of COVID-19 on Thailand, conducted by UN Thailand. Early this month, the impact assessment of COVID-19 on the Industrial Sector conducted by UNIDO and on employment and labour by ILO were released. Read all the reports