Poverty on the rise in Thailand as coronavirus, strong baht batters economy

Thailand is facing rising urban poverty

Around 1.5 million Thais are estimated to have fallen below the poverty line in 2020 due to the Covid-19 pandemic that battered the country’s tourism- and export-dependent economy, bringing the total number of poor to 5.2 million, or 8.8 per cent of the population, according to the World Bank.

Adding to the troubles is a subdued export market as the country’s currency, the baht, remains unusually strong towards major global trade currencies amid the crisis despite some unassertive interventions by the central bank. Prolonged domestic political unrest poses another risk factor for Thailand in the current situation, the World Bank said.

According to the global development institution, the number of Thailand’s poor totaled 3.7 million in 2019 and was on a downward path fueled by growth in the recovery phase after the global economic crisis in 2008 and helped by poverty reduction schemes through state welfare cards.

However, the pandemic brought this trend to an end, said Kiatipong Ariyapruchya, senior economist for Thailand at the World Bank, which defines the poverty line at a daily income of $5.50 per person.

In the first half of 2020, Thailand recorded 340,000 net job losses, with reduced working hours of around three hours for women and two hours for men.

This contributed not only to rising poverty in rural areas, but also created a new form of urban poverty which was not so prevalent so far in Thailand.

Underemployment and reduced income

“The outbreak affected the Thai labour market significantly, particularly during the first half of last year, which led to higher unemployment and more underemployed workers. This reduced the income of Thais,” Ariyapruchya said.

And Thailand’s labour market remains vulnerable.  Improvements in employment, productivity and labour incomes, especially among the poor, will be necessary for a sustainable recovery, the World Bank said, recommending that the government sets up training programmes to improve workers’ skills and provides financial support.

However, there are some rays of hope for 2021 and beyond.

Thailand’s poverty ratio is expected to go down to 8.4 per cent this year amid a gradual economic improvement, with employers likely adding around 850,000 net jobs, the World Bank reckons. With vaccinations for 50 per cent of the Thai population underway by the second half of 2021, the country’s tourism industry should start to recover.

Under this scenario, the World Bank predicts a GDP growth rate of 4.7 per cent in 2022, given the government contains new outbreaks and does not implement a nationwide lockdown until all necessary inoculations have taken place.



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Thailand is facing rising urban poverty Around 1.5 million Thais are estimated to have fallen below the poverty line in 2020 due to the Covid-19 pandemic that battered the country’s tourism- and export-dependent economy, bringing the total number of poor to 5.2 million, or 8.8 per cent of the population, according to the World Bank. Adding to the troubles is a subdued export market as the country’s currency, the baht, remains unusually strong towards major global trade currencies amid the crisis despite some unassertive interventions by the central bank. Prolonged domestic political unrest poses another risk factor for Thailand in...

Thailand is facing rising urban poverty

Around 1.5 million Thais are estimated to have fallen below the poverty line in 2020 due to the Covid-19 pandemic that battered the country’s tourism- and export-dependent economy, bringing the total number of poor to 5.2 million, or 8.8 per cent of the population, according to the World Bank.

Adding to the troubles is a subdued export market as the country’s currency, the baht, remains unusually strong towards major global trade currencies amid the crisis despite some unassertive interventions by the central bank. Prolonged domestic political unrest poses another risk factor for Thailand in the current situation, the World Bank said.

According to the global development institution, the number of Thailand’s poor totaled 3.7 million in 2019 and was on a downward path fueled by growth in the recovery phase after the global economic crisis in 2008 and helped by poverty reduction schemes through state welfare cards.

However, the pandemic brought this trend to an end, said Kiatipong Ariyapruchya, senior economist for Thailand at the World Bank, which defines the poverty line at a daily income of $5.50 per person.

In the first half of 2020, Thailand recorded 340,000 net job losses, with reduced working hours of around three hours for women and two hours for men.

This contributed not only to rising poverty in rural areas, but also created a new form of urban poverty which was not so prevalent so far in Thailand.

Underemployment and reduced income

“The outbreak affected the Thai labour market significantly, particularly during the first half of last year, which led to higher unemployment and more underemployed workers. This reduced the income of Thais,” Ariyapruchya said.

And Thailand’s labour market remains vulnerable.  Improvements in employment, productivity and labour incomes, especially among the poor, will be necessary for a sustainable recovery, the World Bank said, recommending that the government sets up training programmes to improve workers’ skills and provides financial support.

However, there are some rays of hope for 2021 and beyond.

Thailand’s poverty ratio is expected to go down to 8.4 per cent this year amid a gradual economic improvement, with employers likely adding around 850,000 net jobs, the World Bank reckons. With vaccinations for 50 per cent of the Thai population underway by the second half of 2021, the country’s tourism industry should start to recover.

Under this scenario, the World Bank predicts a GDP growth rate of 4.7 per cent in 2022, given the government contains new outbreaks and does not implement a nationwide lockdown until all necessary inoculations have taken place.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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