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11 May 2021

Thai Economy

April KR-ECI Declined as the Latest Wave of COVID-19 Dealt a Blow to Household Purchasing Power while Relief Measures Were Yet to be Implemented

  • ​The latest wave of COVID-19, which began in April, caused the April KR-ECI to plunge to 37.0 from the 40.4 reported in March. Household purchasing power was significantly weakened by the severe impact of COVID-19 while relief measures were yet to be implemented amid surging energy costs. All KR-ECI components declined, in particular on income and employment, plus household expenses (excluding debt). Increased concerns over such matters were consistent with the Consumer Price Index that hit a record high in eight years. Such concerns could further undermine household purchasing power over the near term.

  • ​The 3-month Expected KR-ECI also slipped to 39.4 in April from the 41.5 recorded in March in line with KResearch's view that future economic and household living conditions will be confronted with numerous risks. The overall labor market has yet to recover, particularly in the tourism sector. Therefore, household purchasing power may significantly be threatened by further declines in income. The financial health of households is set to weaken gradually from the previous wave of COVID-19. The government's relief measures may help alleviate the impact of COVID-19 on households and the business sector to a certain extent as sizes of existing relief measures are smaller than those implemented during the first wave of COVID-19 (April-May 2020). Aside from accelerated efforts in vaccine procurement and inoculations, as well as relief measures approved by the Cabinet on May 5, 2021, new assistance measures for households and the business sector may be needed in the future. ​​

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Thai Economy