An additional 1.5 million Thai citizens fell below the poverty line in 2020 as a result of the economic impact of the Covid-19 pandemic, according to World Bank estimates based on a threshold of USD 5.50 per day.
Declines in income have created economic hardship for many, though the government has made good progress in implementing aid measures for households and firms, the World Bank’s Thailand Economic Monitor said in a report launched on Wednesday.
Addressing the pandemic’s impact on Thailand’s labour market, the report said there was a particularly large increase in unemployment among young people, with falling working hours and monthly income.
“Hours worked have not fully recovered, and employment in several sectors including manufacturing remains smaller than a year ago. This means the labor market is in a vulnerable position to confront any future shocks including a resurgence of Covid-19,” the World Bank said in a press release online.
Figures from an earlier national survey indicate that the average number of hours worked per week fell from around 43 in the fourth quarter of 2019 to around 38 in the third quarter of 2020, with women losing more hours than men.
The World Bank report said the shift in income levels brought the total number in poverty to more than 5 million. The poverty rate was expected to increase from 6.2 percent in 2019 to 8.8 percent in 2020, before easing slightly to 8.4 percent in 202
The bank estimated Thailand’s economy to have shrunk by 6.5 per cent in 2020. Exports and private investment are estimated to have declined by 18.5 per cent and 4.4 per cent, respectively, while household consumption declined by 1.3 per cent.
Thai economy growth is projected to expand by 4.0 per cent in 2021. Nevertheless, “the recovery remains vulnerable to downside risks,” the report pointed out. The key risks are an extended resurgence of the pandemic, a weaker-than-expected global recovery, and high household debt levels.
A sustained recovery in employment will be crucial to helping the country rebound in the next couple of years. “The Covid-19 crisis and its economic impact have highlighted a key vulnerability for Thailand: the declining number of working-aged people,” said Birgit Hansl, World Bank Country Manager for Thailand.
“Improvements in employment, productivity and labour incomes, especially among the poor, will be necessary for a sustainable recovery,” she added.
Thailand should implement training programmes to improve workers’ skills and provide financial support while they get back to work as a short-term goal, according to the report. In the longer term, the government could usefully increase employment in the care sector, make childcare more accessible and decrease its cost to help increase female labor force employment, it said.
The bank’s senior economist for Thailand Kiatipong Ariyapruchya suggested that “policies to boost labour productivity and labor market participation of older people and women can help promote a sustainable recovery from Covid-19, while addressing challenges associated with an ageing population.”