- Thailand's economy is expected to sharply contract by 5.3 percent this year as the COVID-19 pandemic continues to weigh on global financial markets, economy and people.
- Experts believe that Thailand has the highest odds of recession among Asian nations.
- Thailand's household debt is among the highest in Asia, accounting for 79.1 percent of the GDP.
Less than a month ago, Maneenut Thongkham was living a comfortable life. Her business was going well. She could feed her entire family, pay her bills and staff. It wasn't an extravagant living, but it was living without stress.
Maneenut owns a massage shop. They are as common on the streets of Bangkok as 7-Elevens. It's ingrained in Thai culture, a vital part of everyday life. During the lunch break, Thais go for a massage; after a rough day at work, Thais go for a massage. This local demand convinced Maneenut to take out a loan and open her own.
It was an industry that could withstand any sort of beating until COVID-19.
"I opened the massage shop for my kids and grandkids. Now I have my grandkids living with me and this shop feeds us all," Maneenut says.
"I don't know what to do. If I don't earn money, I can't afford to pay rent, or meals for us. If there's no money for rent, we can't make it. That's the end for us."
Operating for more than eight years, Maneenut's massage shop now faces an uncertain future as COVID-19 spreads across the world. Dusita Saokaew /CGTN
For Maneenut, it was as if life turned upside down overnight. A tsunami came without any warning, and she was not prepared. For small business owners just like her, no one was.
Kanyanat, a 29-year-old waitress, is also staring down an uncertain road. She is facing weeks, if not months of unemployment. Like many others, she has mountains of debt, dry basins of savings.
Her job seemed secure. After all, she had worked there for five years and her colleagues and bosses were like her family. But like many in Thailand, she lives from paycheck to paycheck. The heavy burden of accumulating bills and taking care of her sick mother in their one-bedroom apartment leaves her with limited options.
"Every month, I have to pay for rent, utilities, credit card bills, and the internet," Kanyanat says. "But I don't have any savings, so if anything happens, I don't have money saved up, so I need to find the new job as soon as possible."
It's a pipe dream as more and more Thais face unemployment. The salt on the wound is that 44 percent of households in Bangkok and surrounding areas are already in debt.
Last year, the average debt load stood at around 11,000 U.S. dollars. Compare that with the country's average monthly earnings of less than 500 U.S. dollars. Total household debt is now equal to nearly 80 percent of GDP, the second-highest ratio in Asia.
Twenty percent of Thailand's working population has a personal debt that is three to four times their income. A study by Puey Ungphakorn Institute for Economic Research shows that more than 30 percent of Thais have less than 20 U.S. dollars in their bank account. Dusita Saokaew /CGTN
Experts believe that Thailand has the highest odds of recession among Asian nations. The country's middle and working classes will continue to face a storm of problems – rising debts, weak consumer spending, factory closures, unemployment. All this can push Thailand into its deepest recession since the Asian financial crisis.
Painful memories of the Asian financial crisis in 1997 still haunts the country as the Bank of Thailand predicts the economy to shrink by 5.3 percent this year. Dusita Saokaew /CGTN
Around two decades ago, Thailand was the point of departure for a devastating financial crisis that began in July 1997 and rapidly spread to other countries in the region before spilling over into economies around the world. Thailand's economy shrunk by 10.5 percent. The crisis cut across all social classes as unemployment rose to dangerous levels. The financial sector said "never again." Those words are now taking on a shaky tone.
Somprawin Manprasert, the chief economist and vice president of the Bank of Ayutthaya, has been monitoring the risk of recession for the past year. "We saw a rising probability for a recession in the Thai economy since the last quarter of last year and that was before the coronavirus," he says. "We are quite sure we are already in a recession."
The question of how deep of a recession will depend on how long this pandemic will last. Nobody knows. But economic effects are being seen loud and clear. And with even more layoffs looming, the list of industries hit by the relentless global viral outbreak begins to read like a list of fallen soldiers, under attack by a virus of many names – fear, uncertainty, COVID-19.