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Thailand proposes more stimulus to boost tourism and employment


Thailand will introduce more stimulus measures to boost tourism, jobs and consumption hit hard by the coronavirus pandemic, a deputy prime minister said, including generous subsidies to encourage more hiring and domestic travel.

Southeast Asia’s second-largest economy suffered its biggest contraction since the 1998 Asian financial crisis in the second quarter as the pandemic put the brakes on vital tourism and domestic activity.

With borders closed to foreign visitors since April, the government plans more incentives to spur local tourism and add more jobs, while other measures will be decided later, Supattanapong Punmeechaow told a briefing.

The tourism and employment perks are expected to be put to cabinet for approval next week, he said after a meeting of a special task force tasked with reviving the economy.

“The job measures should create more than a million jobs, including 400,000 for new graduates,” he said.

The government plans to “co-pay” for new employment with the private sector, Supattanapong said, without elaborating.

On tourism, it plans to increase benefits included in an earlier package to spur domestic travel, to recoup some losses from the absence of foreign tourists, who numbered a record 39.8 million last year, with spending accounting for 11.4% of GDP. The government hopes to increase its subsidies for hotels, flights and bus tickets, said Danucha Pichayanan, a spokesman for the task force.

The tourism-reliant country is expecting full-year visitor numbers to be less than a fifth of last year’s total. It has shelved its “travel bubble” proposal due to new outbreaks around Asia.

The measures will be financed by the government’s 1 trillion baht borrowing, part of a bigger 1.9 trillion baht coronavirus response package.

The stimulus introduced to shore up the economy would be in line with the COVID-19 situation, Supattapong said, adding: “It’s not to devote all resources in a short period”.

Thailand will allow foreign tourists to visit for longer stays from October, a senior official said on Friday, as the government tries to revive a key economic sector that has been devasted by the coronavirus pandemic.

Tourists will have to stay for at least 30 days, with the first 14 days in quarantine in a limited vicinity of their hotel, before they can visit other areas, Tourism Authority of Thailand governor Yuthasak Supasorn told Reuters.

The announcement comes after authorities suspended plans to create ‘travel bubbles’ with partner countries as the number of coronavirus cases in Asia rose.

“On October 1 we will start in Phuket”, Yuthasak said.

Visitors will have to take two coronavirus tests during quarantine before they are able to travel to the rest of the island, Minister of Tourism and Sports Phiphat Ratchakitprakarn, said on Thursday.

“Staff will also have to remain in the hotel”, he added.

Visitors will have to take an additional test and remain within the province for another week before they can travel to other parts of the country.

Thailand has gone nearly three months without a confirmed case of a local COVID-19 transmission. It has recorded over 3,300 cases.

The government’s coronavirus taskforce on Friday extended a state of emergency for another month until the end of September to control the outbreak.

The tourism-reliant economy has been battered by the collapse of global travel as infections spread.

Southeast Asia’s second-largest economy shrank 12.2% in the second quarter from a year earlier, the worst contraction since the 1998 Asian crisis due to the pandemic impact. The country expects to receive 8 million foreign tourists this year. By comparison, it had a record 39.8 million tourists in 2019.

Thailand’s economy suffered its biggest annual contraction since the Asian financial crisis in the second quarter due to the fallout of the coronavirus, prompting the government to slash its GDP forecast for the year and announce more stimulus.

Data from the state planning agency showed a 100% fall in foreign tourism dealt the biggest blow to Southeast Asia’s second-largest economy, while the coronavirus and measures to curb it also hit consumption, private investment and exports.

New Deputy Prime Minister Supattanapong Punmeechaow told a media conference the government would announce more stimulus this month, “to support the economy and all groups of affected people,” adding these would be discussed at a Aug 19 meeting.

The data, which also showed a record contraction quarter-on-quarter, represents another headache for the government, also facing its biggest anti-government protests since the 2014 coup. “Today’s economic release underscores the collapse of aggregate demand, both externally and internally,” said Kobsidthi Silpachai, head of capital markets research of Kasikornbank.


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