The KR-ECI rebounded to 40.4 in March 2021 from 39.5 in February 2021 due to the easing of outbreak control measures prompted by the improving COVID-19 situation, with the cancellation of all red zones and with all restaurants and entertainment venues being allowed to operate during specified shortened hours, while other activities were permitted to carry on as usual. This has also led to an improved perception of income and employment conditions among resident households, stemming from the government’s approval of plans to reopen the country to foreign tourists, which would allow vaccinated foreign tourists to enter the country without quarantining and will be expanded to the whole country after a pilot in Phuket. This was a good signal for the tourism industry, which employs around 3 million people.
However, the impact of the third wave of the COVID-19 pandemic in early April 2021 has changed the KR Household Economic Condition Index (KR-ECI) in the short term, which will lead to high uncertainty again for confidence in economic conditions and households’ livelihoods that started to rise in March 2021. The perception of the income and employment status of households will be affected in particular, as tourism-related businesses will be impacted by the possible delay in Thailand’s reopening plans. Additionally, it may be more difficult to rely on the demand of domestic tourism after the inter-provincial quarantine measures have been implemented in some areas, while there is still high uncertainty about the domestic vaccination program and vaccine adequacy.
The 3-month KR-ECI in March 2021, which showed an improvement, did not account for the impact of the pandemic throughout April. KResearch believes that the government should accelerate the introduction of measures conducive to building confidence in the household and business sectors, including pandemic prevention and control measures as well as accelerated procurement and use of COVID-19 vaccines to immunize the entire population. If the pandemic continues to spread, it will not only affect economic activity, but will also lead to a delay in Thailand’s plan to open up entry to foreign tourists and affect the recovery of tourism-related businesses, which are expected to help make the Thai economy recover this year and continue into next year, especially the peak tourism season at the end of this year. These factors will lead to the growth rate of the Thai economy in 2021 may be lower than the original expectation of 2.6%.
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