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15 May 2020

Thai Economy

April KR-ECI Remains at Low Level as Debt Moratoriums Only Helps Ease Financial Burden Somewhat while Income and Savings Indicators Worsen


    • The KR-ECI came in at 35.1 in April, which was relatively low compared to the reading of 43.5 recorded during the same period last year.  The April KR-ECI, however, improved over that seen in March due chiefly to the decreased debt burden of households because an increasing number of them had been granted debt moratoriums by commercial banks. Their expenditures (excluding debt) also declined from the previous month, partly because households had accelerated spending on essential consumer goods in March 2020. The work-from-home measure introduced by most organizations with the aim of maintaining social distancing caused their health-related expenditures to decline, as well. Some households tightened their spending even further due to concerns over future economic conditions and their own cost of living. This was consistent with the 3-month Expected KR-ECI, which remained lower than the KR-ECI in April 2020.
    • The KR-ECI for April 2020, however, could not reflect whether economic conditions and cost of living of Thai households had passed their worst because the income and savings indicators continued to worsen, while the spending and debt indicators improved, thanks chiefly to the government measures. As a result, close attention must be paid to the cost of living of Thai households, going forward, in particular issues related to income and employment.  
    • KResearch views that economic conditions and the cost of living of Thai households will experience increased risks during 3Q20. Despite a substantial decline in the number of COVID-19 infections in Thailand and the fact that the government has gradually eased some lockdown measures, it will take some time for the economy to recover and business sector to adjus​t towards social distancing amid persistent structural problems seen in the Thai economy.  ​

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Thai Economy