Thailand Economy Suffers from Coronavirus Impact

15th Feb 2020

Beach Swing

The deadly coronavirus outbreak is taking its toll on tourism-dependent countries in Asia and Thailand is not spared.

The kingdom, whose top tourist market are those from mainland China, saw tourist arrivals plunged by nearly 50 percent during the first nine days of February amid the group travel ban on Chinese nationals. It did not help that it has 33 confirmed cases of coronavirus as of press time, following Singapore with 50 infected individuals. The tourism sector accounts for up to 20 percent of Thailand’s gross domestic product (GDP) while the bulk of international tourists comes from China. In 2019 alone, nearly 11 million Chinese tourists traveled to Thailand representing 27.6 percent or the highest share of its tourists, and this year the figure is expected to decline to 9 million.

Besides Thailand, the other countries hit hard by the tourism drop are Malaysia, Cambodia, Vietnam, Singapore, Hong Kong, South Korea, and Japan who are likewise dependent on the Chinese market.

Thais Avoid Chinese-Frequented Areas

Due to fears over the virus which has since claimed over 1,500 lives and infected 60,000 globally, Thai nationals started avoiding places frequented by the Chinese to reduce the possibility of getting infected. Other countries have also imposed a total travel ban on all flights from all Chinese territories to prevent the virus from advancing while China put Wuhan City on a lockdown where the virus originated. Previously a tourist-frequented area, the Klong Khong beach in Krabi province has recorded only a few Chinese tourists since the virus outbreak.

“Last month, there were many, many Chinese staying here,” said an official from a resort on Klong Khong in an interview with Time magazine. “Now it’s just one room.”

Baht Worst-Performing Asian Currency

Not only was tourism suffering from the virus’s impact, but it also overturned the Thai baht into one of the worst-performing currencies in Asia.

This prompted the Bank of Thailand to slash rates by 25 basis points to 1 percent, a record low while referring to the virus as “one explanation that will haul down development.”

The central bank said that the reduction was to respond to the economy that was severely battered by the pandemic.

Preventive Measures Laid Out to Mitigate Impact

To mitigate the impact of the drop on the economy, Thailand is taking preventive measures such as reducing value-added taxes on tourism business travels and fuel tariffs for tour boats, the development of homeport for cruises, and the establishment of an office to regulate the direction of tourism.

A proposal for entertainment-related businesses to stay open until 4 am is also sought for Cabinet approval.