Business
Concern Fluctuates Over Omicron Variant in Thailand
As a result of the World Health Organization’s designation of the new, highly contagious Omicron strain as a variant of concern on Nov 26, many countries have reversed their position on Covid-19 curbs.
Thailand was one of those nations that abandoned the idea of replacing costly RT-PCR tests with more affordable antigen test kits in order to attract tourists.
During the past two weeks, public concern about the new variant has fluctuated. After news of the variant spread, the Stock Exchange of Thailand Index declined by almost 80 points or 4.8%.
Following the government’s pledge not to reimpose a lockdown and appeal to the public to remain calm, the stock market settled.
In Thailand, there were a few confirmed cases of Omicron, but lower daily infection totals — less than 5,000 cases each day — have contributed to a positive outlook for the first half of December.
For those still reeling from the Covid crisis, a new variant has crushed their hopes of resuming economic activities, while the government has not been responsive to their pleas for assistance.
Thailand will overcome Omicrom obstacles
Even as tourism businesses, such as hotels, prepare for international arrivals, some outbound tour operators still face obstacles due to mandatory quarantines at many destinations.
The Thai Travel Agents Association president, Suthiphong Pheunphiphop, said last month’s optimism about outbound package tours suddenly turned to the gloom after the Omicron variant was detected in many countries.
According to him, travellers were concerned about the situation because not enough information was available about the new variant.
After learning that Omicron may not be more dangerous than other variants, such as those who are immunized, Mr Suthiphong observed a gradual return of good vibes in outbound travel.
While public concern may subside, Omicron has already affected the reopening policies of many countries, including Japan, which has reinstated strict border controls. Caseloads in South Korea have risen even without the threat of Omicron, he said.
According to Chotechuang Soorangura, managing director of NS Travel and Tours, outbound tours will resume with limited options and fewer potential customers since operators can only offer excursions to Europe and the US, which are often more expensive, appealing to those with large budgets.
Omnicron travel restrictions
Thailand’s travel restrictions in Europe are minimal. Switzerland, for instance, accepts vaccinated travellers and is included on the Test & Go list that doesn’t require quarantine upon their return.
In the meantime, he said, if the major destinations for Thai tourists remain closed during the high season of outbound tours in April, there is little hope of stimulating mass tourism demand.
Due to border closures, most tour operators are experiencing a liquidity crisis as outbound sales have been delayed, said Mr Chotechuang.
Low-income earners can save three times as much on living costs by renting a unit. Renting a unit costs 2,500 Baht a month, compared with 7,000 Baht for a monthly instalment. “Rental homes can help raise their standard of living.”
According to Mr Meesak, the government can promote those with savings, which stand at over 15 trillion baht, to invest in residential properties and rent them out through tax incentives.
Economic recovery incentives
A price cap of 2 million baht or less could be used to target low-income tenants. Developers who rent out units to low-income people could also reduce corporate taxes, he said.
According to Mr Meesak, the special business tax for property transactions should be cut to 0.1% of the value of the property from 3.3% so as to spur the market, as it did from 2008-2009.
It is suggested that the current property incentives — a deduction of transfer and mortgage fees from 2% and 1% respectively to 0.01% each for residential units priced no more than 3 million baht — should be extended through next year.
According to Mr Meesak, the deduction should apply to units priced up to 5 million baht because the purchasing power in this segment is strong.
Alternatively, incentives could be offered to all price ranges, but only the first three million baht would be deducted, he added.
It is also important to offer reduced mortgage fees for self-built and second-hand homes, according to Issara Boonyoung, chairman of the Thai Chamber of Commerce’s real estate committee.
As a result of the pandemic, many developers require debt restructuring. The government should extend the two-year effective period for construction permits, he said.
Lockdowns damaged the economy
As a result of the government’s lockdown measures, domestic car sales dropped by 38.8% year-on-year to 42,176 units in August.
Omicron has caused concern among major car manufacturers participating in the 12-day Thailand International Motor Expo, which ended yesterday. The Federation of Thai Industries (FTI) and the Association of Used Cars voiced concerns.
According to Surapong Paisitpatanapong, vice-chairman and spokesman of the FTI’s automotive club, “no sector can let down its guard or problems will escalate.”
It is a good idea for the government to carry on with stimulus measures, such as the “We Travel Together” tourism scheme, as they are quick and direct ways to inject money into the economy.
Despite the authorities’ good work, the government needs to extend the time for implementation of these schemes because the economy still requires assistance, according to Mr Surapong. In the New Year period, we’ll see if more stimulus measures are announced.”
In around a month, the club expects to discover if Omicron is a more virulent strain capable of causing another outbreak in Thailand.
Continue stimulus measures
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said that the private sector hopes the government will introduce new stimulus measures as a New Year gift to the public, especially the extension of the tax rebate “Shop Dee Mee Khuen” program.
Next year, the government should continue stimulus measures, since it still has a huge pool of funds that can be used to finance them.
270 billion baht remains from the 500 billion baht borrowed under the second emergency loan decree. 12 billion baht remain from the 1 trillion baht borrowed under the first emergency loan decree. A mid-year budget for fiscal 2022 is worth 89 billion baht.
In addition, the government still has room to borrow to rehabilitate the economy since it raised the public debt-to-GDP ratio from 60% to 70%, said Sanan.
A shutdown is NOT necessary
If Omicron’s spread can be controlled, economic recovery is expected to continue.
“Thailand’s public health system still has the capacity to manage and contain an outbreak of the new strain,” said Mr Sanan. “The private sector insists the country should not be shut down because a lockdown would have massive economic consequences.”
According to him, a continued mass vaccination campaign will make an Omicron outbreak less damaging than a Delta outbreak.
It’s important to get those 10 million people vaccinated,” said Mr Sanan.
Chaddatip Chutrakul, CEO of mall operator Siam Piwat, said that the company is unfazed by the new variant. After the country’s reopening on Nov 1, the four retail complexes — Siam Center, Siam Discovery, Siam Paragon, and Iconsiam — have seen customer traffic recover.
Economy improving in Thailand
The retail business sentiment in Thailand is much better than last year. The private sector is very strong in Thailand. We’ve faced many challenges and overcome them all,” she said.
“Even if there are new outbreaks, this won’t be a new problem. We have learned lessons from the past two years, and are confident we can manage our business.”
As long as local consumers keep up the positive momentum shown at the end of this year, retail prospects remain promising, said Ms Chadatip. Sellers need to adapt to changes as the tourism sector will not recover until next year.
According to Pinyo Tanawatcharaporn, president of the Association of Used Cars, there is no need to panic as Thailand has dealt with Covid-19 for nearly two years.
A well-prepared state public health system is necessary. “We don’t want another hospital bed shortage,” he said.
“The government will not be forced to resort to lockdowns if adequate preventive measures are in place.”
