Even before the Covid-19 pandemic hit Thailand, the country’s banking system was facing bleak growth prospects. The economy suffers from serious competitiveness constraints, including a swiftly ageing society, comparatively high labour costs in a low-cost region, a limited pool of skilled workers and high-tech engineers, and a strong baht currency (pegged on its sound fiscal fundamentals, such as steadfast current account surpluses).
Then came Covid, prompting lockdowns from April to May 2020, and bans on international flights — decimating the once robust tourism sector that represents nearly 18% of gross domestic product (GDP). The Bank of Thailand (BoT) predicts an 8.1% GDP contraction this year, at least, and predicts things will not return to pre-Covid levels until 2023 at the earliest.
