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22 Jan 2020

Thai Economy

Escalating PM2.5 problem prompts government to speed up measures to address the problem as people pay attention to health risks (Current Issue No.3076)

             The airborne PM2.5 has returned to become a serious issue since the start of 2020. The thickening smog, exceeding the standard safe level, prompted the Cabinet to approve measures to prevent and address the PM2.5 crisis on January 21, 2020. KResearch assessed the economic impacts of PM 2.5 particles, which are smaller than the standard size, and came up with the following estimates,  covering opportunity costs on people's health, tourism and  other business sectors as a result of people's behavioral changes to adapt to the situation.

                KBank estimates that the economic impact of the dust problem in the Bangkok Metropolitan Region, due to the abovementioned factors, at approximately 3.2-6.0 billion Baht (within a one-month timeframe between 5 Jan - 5 Feb 2020) which is close to the period in the previous year. The economic impact was divided into the health-related costs (medical expenses and costs of dust masks and air purifiers) worth 2.0-3.0 billion Baht, tourism-related opportunity costs of 1.0-2.4 billion Baht and others such as opportunity costs of street food restaurants, outdoor fine dining and flea markets to the tune of 200-600 million Baht.

                  The government has placed importance on the issue by allocating funds to related ministries in the budget bill for the fiscal year 2020 to solve problems and mitigate the effects that occur. Nonetheless, it would require cooperation from all parties, both the private and public sectors, to lessen the effects of the problems. For example, the private sector may become more vigilant in vehicle inspection, construction management and oversight of industrial facilities to reduce air pollution. At the same time, people and farmers may contribute to the effort by refraining from burning trash, dried grass or crops.