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9 Feb 2021

Thai Economy

New COVID-19 outbreak caused KR-ECI in January 2021 to drop from the previous month, though the Index was higher than during the first wave


·  The KR Household Economic Condition Index (KR-ECI) in January 2021 and the 3-month Expected KR-ECI both fell from the previous month to 37.2 and 38.8, respectively. Almost every component of the Index dropped, particularly employment  and income level post COVID-19 resurgence since mid-December 2020. Certain economic activities were once again disrupted as COVID-19 prevention and control measures were reintroduced.

·  KResearch has conducted an additional survey to determine the impacts of the COVID-19 resurgence on households in comparison to the first wave of the pandemic. The poll shows that the majority of households were moderately affected by the new outbreak but were still able to maintain their livelihoods, albeit with increased spending caution. This situation corresponds with the index, which remains higher than in April 2020 (onset of the first wave) despite its recent decline, indicating that the anxieties of Thai households are at a lower level than in the period of the first outbreak. Nonetheless, the government's relief measures remain necessary for the majority of households as they are in need of cash handouts the most similar to that which was seen during the first wave.

·   The COVID-19 resurgence has once again derailed business activity in certain sectors, and such industries will take more time to recover. However, the infection prevention and control measures this time around have not been as stringent as the first time they were implemented. Additionally, the government has issued stimulus packages like the “We Win" financial aid scheme, which aims to ease the impacts of the coronavirus outbreak as quickly as possible. Likewise, anticipation for the vaccines has also contributed to a more optimistic outlook. Thus, KResearch views that the impending impact on the economy should not be as devastating as that of the initial outbreak in 2020. Nevertheless, the financial positions of businesses and households that were already weakened by the effects of the first wave may now require even more time to return to their pre-pandemic levels. ​​

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Thai Economy