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4 Jun 2020

Thai Economy

Unemployment rate in Bangkok rose to 9.6 percent in May 2020; government advised to create additional jobs (Business Brief No.3868)

KResearch conducted a survey on the well-being of Thai households in Greater Bangkok in the wake of the COVID-19 outbreak, in the period between May 21 and May 28, 2020. Following are some of the most noteworthy findings from the survey:

    • The unemployment rate in Greater Bangkok for May 2020 was at 9.6 percent, with a majority of the unemployed losing their jobs as a result of COVID-19 and the lockdown measures which prevented them from working in their trades. The unemployment rate is likely to peak during 2Q20, before decreasing in the second half of the year under the assumption that there is no second wave of the viral transmission, which could potentially lead to a reintroduction of lockdown measures.​
    • Most Thai households have increased awareness of the importance of savings and revenue diversification after confronting the COVID-19 situation, with Thai households separated into three distinct groups based on their respective COVID-19 financial relief packages, as follows:
  1. Informal workers who received financial relief under the “Thailand Stays Strong" scheme, with research showing that 35.5 percent of this group have reverted to searching for temporary jobs after the end of the measure.
  2. Formal workers who were affected by the COVID-19 pandemic and have subscribed to unemployment benefits via the Social Security scheme in cases concerning COVID-19, with research showing that 47.4 percent of this workforce have chosen to diversify their revenue streams by taking on an extra occupation.
  3. Workers who have not registered to “Thailand Stays Strong" and have not received any compensation in cases of COVID-19 under the Social Security Fund, by which this workforce displays awareness of the importance of self-regulating personal spending, with 43.8 percent of the workforce in this group having started to build on their savings and become more cautious in their spending, and 28.4 percent actively seeking additional jobs for income diversification.
    • In conclusion, the survey indicates widespread changes in the labor market and household expenditures over the foreseeable future. The 'new normal', as reflected in the findings of the survey, demonstrates the importance of the e-commerce sector in absorbing the workers who have lost their jobs due to COVID-19, in place of the agricultural sector. Meanwhile, spending patterns in Thai households have taken on a more cautious tone, as more and more people have developed financial discipline. Therefore, this situation reflects an urgent need for the government to issue economic measures to generate employment and support the newly unemployed once the initial relief measures end, as well as measures to promote savings, which would benefit many groups of workers. ​