Advance Blog

June 1, 2020
Australian Embassy

Headlines summary as of 1 June 2020

News

  • Updates related to COVID-19:
    • Today, Thailand reports a newly confirmed case, a total of  3,082cases. Out of the total number, 2,965 have been discharged from the hospital; 60 are being hospitalised. The death toll is at 57. The newly confirmed case is a Thai lady arriving from Russia and has been in state quarantine since. According to CCSA, today marks the seventh consecutive days when there is no single local transmission in Thailand. 
      • The CCSA spokesperson said we still cannot be at ease since it must be 14-21 days straight without any local transmission.
    • Today is the beginning of the 3rd phase COVID-related restriction with lesser curfew hours, longer operating hours for stores and more businesses to be re-opened.
      • Media picked up a part of the interview by the Dean of Faculty of Medicine, Mahidol University, pointing out the possibility of the 2nd wave transmission after the ease of lockdown is imminent. The faculty later pointed out that the media report is misinformation.
    • Thai media reported quoting Yomiuri (a Japanese news agency), reporting on the Japanese government’s plan to re-opening its border to welcome tourists from Thailand, Vietnam, Australia and New Zealand which have low numbers of COVID-19 infections.

Politics

  • The Parliament voted to pass 3 executive decrees backing the borrowing of 1.97 trillion baht to finance economic support packages to ease the COVID-19 effects.
    • The Opposition was joined by the second and third largest coalition Bhumjaithai and Democrat party to set up a committee to scrutinise the spending of the bill.
    • Yesterday, media reports on factions in the main ruling Palang Pracharat Party (PPRP) where there were meetings held at the exact same time by each faction leaders to do head-count of MPs in the upcoming bid of the leadership change.
    • The 3 factions of Saam Mitr Group, Government chief whip Wirat Rattanaset’s group and Bangkok faction led by Education Minister Nataphol rallied to support Deputy PM Prawit to replace the current leadership.
    • Finance Minister and Party leader Uttama and Energy Minister Sontirat Sontijirawong, as the PPRP’s secretary-general, also called a meeting of MPs to secure the support of MPs at Room 417 in Parliament complex while Deputy Agriculture and Cooperative Minister Thammanat is reported to convene a meeting of
      nearly 30 MPs in the next room. 
    • Vocal MP Sira said the reports of Mr Uttama and Mr Thammanat factions being able to rally 60 MPs might be false. He heard that the group had only 26 MPs. The rest of the MPs might be ‘battered’ (enlarged) by flour from Australia (an attack against Mr Thammanat and his involvement with smuggling ‘flour’ into Australia). 
    • Breaking: Media reports that Mr Somsak, one of the main member of the Saam Mitr Group said, there is going to be a ‘big news’ this afternoon. Media expected that half of the PPRP executives will resign rendering the current leadership under Uttama and Sontirat to be out of position. The party assembly will be convened and the new leadership will be nominated, prior to the cabinet reshuffle later this month. 
  • Army chief General Apirat Kongsompong is reported to order a committee to be set up to look into alleged corruption in solders’ allowances at the army’s Ordnance Department after Sergeant Narongchai Intarakawee came out to blow the whistle on the issue. Earlier, the situation was turned upside down, when the supervisor of the Sergeant was filmed threatening him to behave according to the Army’s ‘code of conduct, unless he did not want to proceed in this career. Gen Apirat also has threatened to impose severe penalties on Sgt Narongchai as he said the latter had deserted the military for more than 16 days. Sgt Narongchai could be charged with absence without leave and face a jail term of up to 7 years if found guilty.

Business:

  • According to the Bank of Thailand, Thailand’s key economic data contracted to record-low levels in April.  The only factor supporting the economy was public expenditure, evidenced by an expansion of 28.9 percent in April YoY.
  • There are no foreign arrivals in April and May due to the inbound travel ban.  From January to April, international arrivals declined 52.2 percent YoY, totalling 6.69 million.
  • From January to April, Thailand still reports a current account surplus of USD8.9 billion. April’s merchandise export value saw a contraction of 3.3 percent YoY, and by 15.9 percent if gold is excluded.  Exports of automotive and parts in April plunged by 49 percent to a record low. Import value dropped 17 percent in April YoY, resulting in a current account deficit of USD700,. 
  • Private consumption dipped 15.1 percent YoY to a record low, as did consumer confidence and business sentiment.  The number of firms registered for temporary business suspension under Section 75 soared to 2,406 in April from 445 in March, while that of employees under the section surged to 465,218 from 96,264.  Source:  https://www.bangkokpost.com/business/1926560/quarterly-figures-hit-record-trough
  • The automotive sector and related supply chain demand urgent assistance from the government, otherwise it may collapse,.  Excise Department had earlier rejected the Federation of Thai Industries’s (FTI) proposal for the government to slash excise tax for cars by 50 percent.  Excise tax on cars contributes 100 billion Baht annually to state revenue.  FTI’s other proposals are: a car-trade-in scheme for 100,000 Baht paid by the state and a delay in Euro 5 emission standard enforcement.
  • In the worst-case scenario, FTI projects that the 2020 car production could plunge to 1 million with 50:50 percent ratio allocation for domestic and export.  Consequently, car sales in 2020 could amount to only 5 million, a 50-percent drop YoY.  This is in line with Nissan’s projection that car production will stand at 6 -6.1 million, the lowest in ten years.  The impacts will be more severe on eco-cars than pick-up cars.  Nissan has resumed its plant 1 in Samut Prakarn, but the second plant remains shut until further assessment based on the easing of the lockdown.
  • From January to April, FTI revealed that Thailand had a total auto capacity of 478,393 units, a 32.8 percent YoY decrease.  The number of car sold was 230,173, a 34.2 percent decline YoY.  In April, car production slid 83.6 percent YoY and 83.2% from March to 24,711 units.  Source:  https://www.bangkokpost.com/business/1927372/fti-sounds-alarm-on-auto-industry https://www.thansettakij.com/content/motor/436085
  • Thailand’s car part export is anticipated to contract by 10 percent in 2020 as the country is an original equipment manufacturer for many global brands.  In Q1 of this year, Thailand’s car part export saw a 1 percent increase YoY, totalling 5.4 billion USD.  In April and Q2, export figure is expected to see negative growth but will improve starting from Q3.  However, Thailand’s car part export still faces non-tariff barriers from the new NAFTA (USMCA), which requires cars to use 75 percent local content to be eligible for tax exemption.  Source:  https://www.thansettakij.com/content/Macro_econ/436093

Others:          

  • CPTPP will be considered by the parliament at its next meeting.  New Palangdharma Party believes that the members of parliament will agree with the establishment of a committee to deliberate Thailand’s accession to CPTPP as it relates to the interest of the nation.  Source:  https://www.bangkokbiznews.com/news/detail/883071
  • Airbnb expects the market for longer-term stays to expand as people become accustomed to working remotely.  The pandemic will trigger tourists to travel by car within a few hours’ drive from home province, wherein domestic travel will lead Thailand’s recovery.  Short-term rentals will become an essential part of Thailand’s tourism mix and a valuable driver of economic growth.  Airbnb contributed to over 40 billion Baht to Thailand in 2019, a 17 percent increase YoY, with an average daily guest spend of 3,291 baht.  Source:  https://www.bangkokpost.com/business/1927384/outbreak-spurs-longer-stays
  • Finance Ministry said the government can borrow an additional 100 billion Baht to offset a budget deficit if state revenue collection for fiscal 2021 misses its target due to the pandemic and drought.  The fiscal 2021 budget deficit will widen to 730 billion Baht if the additional borrowing is sought.  The 2021 budget has set targets for expenditure at 3.3 trillion Baht and revenue at 2.67 billion baht, leaving a deficit of 630 billion Baht.  Source:  https://www.bangkokpost.com/business/1927404/budget-bureau-gives-nod-to-further-b100bn-in-borrowing
  • Incentives from the Finance Ministry may be added to the Board of Investment’s privileges for investment in bio-economic corridors, especially in the farm sector.   BOI in February approved in principle the promotion of Thailand as a bio-economy hub as part of the S-curve industries, which will also increase local income household and reduce income inequality Source: https://www.bangkokpost.com/business/1927376/finance-ministry-seeks-ways-to-boost-bio-economy

ASEAN/World

  • Thai media reports on the unrest in many states in the US after the deadly arrest of an African American Mr George Floyd. The protest under the message ‘I can’t breathe’ has been spilled over to other cities in Europe.–All media outlet
  • Last Friday, FCCT launched a talk on  ‘Milk Tea Alliance: Diplomacy in the Social Media Age’, discussing the phenomena when the Thai, Hong Kong and Taiwanese netizens, forming a ‘milk tea alliance’, were involved in the online spats with Chinese mainland netizens. The panel discussed the limitation of mainland ‘soft power’ in winning favour over Thai younger generations.—Matichon
The Australian Embassy Bangkok
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