&

KIRIDA
BHAOPICHITR
15 July 2020
 • Earliest planned completion date for COVID-19 is September 2021.
• After successful phase II, once safety has been established, vaccines could be granted emergency
use, e.g. for frontline health workers.
Vaccines currently undergoing clinical trials

Type: Protein Based Type: Protein Based Type: Virus Vector Type: Virus Vector
PROGRESS PROGRESS PROGRESS PROGRESS
Phase I – Nov 2020 Phase I/II – Jan 2021 Phase I – Jan 2021 Phase I – Jun 2021
Phase II – Feb 2021 Phase II/III – Sep 2021

Type: Genetic Vaccines Type: Genetic Vaccines Type: Genetic Vaccines Type: Genetic Vaccines
PROGRESS PROGRESS PROGRESS PROGRESS
Phase I – July 2020 Phase I – May 2021 Phase I/II – Aug 2021 Phase I – Nov 2021
Phase II – Apr 2021

SINOPHARM
Type: Inactivated Virus Type: Inactivated Virus Type: Inactivated Virus
PROGRESS PROGRESS PROGRESS
Phase I/II – Nov 2021 Phase I/II – Oct 2020 Phase I/II – Sep 2020

Source: Vaccine Centre, London School of Hygiene & Tropical Medicine and New York Times 2
 • World Bank projects the global economy to contract by 5.2% in 2020, much worse than during
the 2008-09 global financial crisis, as advanced economies in the West contract by 7%.
• Global economy will grow slowly next year, reaching pre-COVID levels only in late 2022 at
the earliest, and grow modestly thereafter; advanced economies, however, will not recover to
pre-COVID levels until 2023 at the earliest.
GDP Growth Forecasts by World Bank
RUSSIA
WORLD Growth in 2020 2021
Growth in 2020 2021
EURO AREA
2019
1.3% -6.0 2.7 % %
2.4 -5.2 4.2
2019
(1.6%) (1.8%)
% % % Growth in 2020 2021
(2.5%) (2.6%) 2019
1.2% -9.1 4.5 % %
CHINA
ADVANCED ECONOMIES USA (1.0%) (1.3%)
Growth in 2020 2021 JAPAN
2019
1.6%
Growth in 2020

-7.0% 3.9%
(1.4%)
2021

(1.5%)
2019
2.3%
Growth in 2020

-6.1 4.0 %
2021

%
MIDDLE EAST
AND NORTH AFRICA
2019
6.1% 1.0 6.9 %
(5.9%)
%
(5.8%)
2019
0.7%
Growth in 2020

-6.1 2.5 %
2021

%
(1.8%) (1.7%)
Growth in 2020 2021 (0.7%) (0.6%)
EMERGING MARKET AND
DEVELOPING ECONOMIES
2019
-0.2% -4.2 2.3 % %
INDIA EAST ASIA
AND PACIFIC
Growth in 2020 2021 LATIN AMERICA (2.4%) (2.7%)
Growth in 2020 2021 (excluding china)
2019
3.5% -2.5% 4.6% AND THE CARIBBEAN 2019
4.2% -3.2 3.1 Growth in 2020 2021
(4.1%) (4.3%)
2019
0.8%
Growth in 2020

-7.2 2.8 %
2021

%
%
(5.8%)
%
(6.1%)
2019
4.8% -1.2 5.4 %
(4.9%)
%
(5.0%)
(1.8%) (2.4%)

Note: shows increase/decrease compared to previous year; Number in bracket is forecast in January 2020; Size of circle is the size of economy
Source: Global Economic Prospects (June 2020), World Bank and TDRI calculation 3
• Thai economy could contract by 10% this year and will not reach pre-COVID levels until 2023
as exports, tourism and domestic consumption will only start to pick up once the COVID-19
pandemic ends.
• Post-COVID, exports will be affected by lower Household debt
global purchasing power and higher trade Household debt % of GDP (right axis)
barriers; tourism will recover to pre-COVID 13.6 80
levels only in 2023 when the pandemic is 13.4 79.5
behind and international movements of 13.2 79
people fully resume.

Trillion baht
13 78.5

• With rising household debt burden and fall in 12.8 78

incomes and savings, household 12.6 77.5

consumption recover to pre-COVID level 12.4 77
0.5-1 year after the pandemic is over. 12.2 76.5

• Rising NPLs and excess capacity will lead to 12

Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19
76

a slump in private investment and delay Source: Bank of Thailand

adoption of automation until 2022.

4
 NEGATIVE IMPACT ON BUSINESS POSITIVE IMPACT
HIGH MODERATE LOW ON BUSINESS
employees
>1 Million

• Shopping malls
• Hotels • E-commerce (Food,
• Retail shops
online Marketplace, etc.)
IMPACT ON EMPLOYMENT

• Delivery services &

packaging
• Airlines
• E-services (education,
100,00 – 1 Million

• Wellness, Spa
banking, movies, etc.)
employees

• Hair salons, Barber • Restaurants

• Digital services
shops • Construction • Electronics
• Telecom services
• Pubs & bars
• Medical supplies (face
• Automobile and parts
mask, alcohol,
• Garments
medicines vitamins,etc.)
• Food
• Entertainment • Electricity, gas
employees

• Public transportation • Insurance

<100,000

venue/services • Healthcare services

• Gas station
• Booking agency • Education
• Property
• Tour companies • Professional services

Source: BOT, Bangkokbiznews, Thansettakij, marketingoops, Phatra, SET, TRIS, TDRI analysis 5
 • Jobs of 9.7 million people are severely affected by the lockdown from Covid-19 outbreak, with
the largest group being retailers followed by cooks & waiters, hair dressers, tour guides and taxi,
van and motorcycle drivers.
Employed persons impact from COVID-19 by occupation (Million persons) Low impact
Low impact occupation* 12.1 million persons
Agriculturists 11.8 Moderate impact
High-skill Technicians, tailors
Retailers
3.9
5.1
15.6 million persons

Cooks, waiters, hair dressers, tour guides 1.6

Taxi, van & motorcycle drivers 1.2
Low-skill workers 0.6
Street vendors 0.4
Hotel or restaurant managers 0.3 High impact
General hired workers
Assistant cook
0.3
0.1
9.7 million persons
Head chefs, museumand art center directors 0.1
Tourism operators and hotel staff 0.04
Singers 0.02
General customer service 0.02
Controllers, technicians on ships & airplanes and pilots 0.01
Source: BOT, Labor Force Survey Q3:2019 with TDRI calculation
Note: Low impact occupation include State employees, heath care workers, chemists, physicists, computer programmers, telecom workers and
high-skilled workers 6
 &
Global agriculture prices
Rice Sugar Rubber (Right Axis)
• Farm incomes from rice may rise yoy this 0.9 2.8
year, while those from rubber and 0.8 2.4

Thousand USD / metric ton

Thousand USD / metric ton

sugarcane falls as 0.7 2.0
0.6 1.6
• Production of rice falls by 6-7% and 0.5 1.2
sugarcane by 40% from severe drought 0.4 0.8
in 2020H1, while rubber production falls 0.3 0.4
0.2 0.0
as farmers were unable to tap rubber 2014 2015 2016 2017 2018 2019 2020
Mar

during the curfew. Source: World Bank

• Rice prices will rise by around 10% this YoY Growth of Farm income by Crops (2020)
year, while rubber and sugar price falls 30
Price Production Farm income

with lower crude oil price and global 20

demand. 10
0
Percent

• Incomes of agriculture households have -10

also fallen as their 65% of their incomes -20
-30
are from non-farm activities &
Feb

Feb

Feb

Feb

Feb

Feb

Feb
Jan

Jan

Jan

Jan

Jan

Jan

Jan
remittances from non-farm family Total Fruits Fowl Sugarcane Swine Rubber Paddy
members. Source: Office of Agricultural Economics with TDRI calculation 7
• Public Debt Management Office projects public debt to GDP to reach no more than 58% this fiscal
year (includes Bt0.6 trn out of the Bt1 trillion borrowing bill, which will borrowed this fiscal year).
• The Government has so far provide cash Public debt
transfers of almost Bt350 billion to almost 30 (Fiscal year)
10
million individuals. 8.2
• There is room for further government 8
6.8 7.0
borrowing of up to 60-65% of GDP or another

Trillion baht
6
Bt 0.8-1.5 trillion, if needed.
• But if the economic slow down extends 4

beyond 2022, there will be little room left for 2

additional fiscal stimulus.
• It is therefore important how the funds are 0
2018 2019 2020F
used to support the vulnerable, stimulate (% of GDP) (41.88%) (41.19%) (58%)

demand and prepare for the post-Covid world. Source: Public Debt Management Office with TDRI calculation

8
Domestic tourism • Domestic tourism will start recovering in
Q3/2020 with FIT, seminars, conferences,
and leisure travel; it will not fully recover
to pre-COVID level until 2022.
• Government’s domestic tourism stimulus
packages of Bt22.4 billion from July to
October 2020 will also help.
TRANSITION PERIOD
• Health consciousness will shift pattern of tourism
• from mass tourism to FIT and mainly domestic tourists
• from large hotels to boutique hotels
• from long distance to shorter travel distance as long-
distance flights are few and more expensive.
• Air travel cost will be higher as there are fewer
flights and aviation rules require physical
distancing in long flights.
• Air Asia, for example, may increase prices by 10-15%
to break even.
• Many M&As in hotel and airline businesses are
expected.
Foreign tourism • International tourism will start to
slowly recover end-2020 with focus
on selected business and medical
travelers.
• Foreign tourists who are vaccinated
can start to come in 2022.
• Full recovery will not be until 2023
POST-COVID
• Pre-COVID patterns of tourism will return.
• There will be opportunities in medical tourism and
health & wellness as Thailand has strengthened its
reputation from handling the pandemic e.g. Dusit
Thani has partnered with a hospital to start a
wellness facility in Hua Hin.
• Regional tourism will increase as international
tourists, especially from China, will reduced their
travel budgets; Chinese tourists will prefer to travel
to countries that do not have an anti-Chinese
sentiment.
• AR/VR in tourism will not happen.
9
 • As economies shrink, nations are
World merchandise trade volume compelled to support domestic producers
Merchandise trade Trend 1990-2008 by using trade protectionism policies,
Optimistic scenario Trend 2011-2018 which will hurt the global economy.
Pessimistic scenario
140
• Global trade is expected to be significantly
130
lower than its pre-COVID-19 level due to
120
weak demand & protectionism
110
as witnessed after
Index, 2015=100

100
90 the global financial crisis of 2009 (GFC);
80 shortened supply chains will also reduce
70 global trade post-COVID.
60
• Linkage between global trade growth and
50
economic growth will be weaker; Thai
40
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 export growth will unlikely reach 5%
Source: WTO post-COVID.

10
11
 POVERTY REDUCTION GLOBALIZATION
• COVID-19 pushed millions into extreme poverty • Leaders will prioritize domestic over global issues,
especially in most affected areas (South Asia & leading to nationalism & protectionism.
Sub-Saharan Africa) • Tariff rates likely hiked as in previous crises
• Implications: Reduced purchasing power • Major powers act unilaterally, while
international organizations (e.g. WTO. WHO,
COVID-19 added millions into extreme poverty globally UN) lose influence.
740
Millions of people in extreme poverty

720 June downside • Implications: Shorter supply chains, regionalization,

700 projection
680
and “G-zero” world.
June baseline
660 projection Average Tariff Rate (%) of Major Industrialized Countries
640
Pre-depression (1928) Global Financial Crisis (2008)
620
Post-depression (1935) Pre-COVID-19 (2018)
600 35 3.5
580 Pre-COVID-19 30 3.0
560 projection
25 2.5
2015 2016 2017 2018 2019 2020 2021
Percent

Percent
20 2.0
15 1.5
Additional people driven into extreme poverty 10 1.0
Millions 0.9 during COVID-19 pandemic 5 0.5
4.5 2.7 2.8 15.6 22.6 0 0.0
of people

Japan

Japan
Germany

Germany
UK

UK
USA

USA
France

France
East Asia & Pacific Europe and Central Asia Latin America & Caribbean
Middle East & North Africa South Asia Sub Saharan Africa
Source: Lakner et al (2020), PovcalNet, World Bank Global Economic 2020 Prospects, Source: Barry Eichengreen and Douglas A. Irwin (2009), “The Great Depression
and the Protectionist Temptation: Who Succumbed and Why?” and World Bank 12
 INCREASING INEQUALITY RISING POLITICAL TENSION
• Informal workers tend to lose more wealth President Trump Job • COVID-induced inequality
because of inaccessibility to government support. Disapproval create political instability and
1,000 cases potential chaos.
• Poor households are less likely to work from 54
home, so they benefit less from efficiency gains. 52
• Implications: rise of populist
government worldwide and
• Low skill workers will have difficulty finding jobs 50
48 reversed globalization.
• Implication: Lower purchasing power Jan Feb Mar Apr May Jun Source: RCP

Ability to Work from home (WFH)

DEEPENING AGING SOCIETY
Income (baht) • Birthrate will decline as it normally does in economic
> 30,000
downturns.
16,001 – 30,000 • Implications: Lower demand for child-related
12,001 – 16,000 businesses and more opportunities for grey economy
9,001 – 12,000 New-borns in Thailand, 1994-2000
1.0
Million person

6,001 – 9,000 0.8

0.6
≤ 6,000
0.4
-1 0 1 0.2
unable to WFH can fully WFH 0.0 Source:
Source: PIER from LFS2019Q3 1994 1995 1996 1997
1997 1998 1999 2000 NSO, 2019
13
 ONLINE COMMERCE/SERVICE FROM-HOME ECONOMY
• E-commerce, related businesses and on-demand From-home economy will drop from current level but
entertainment will keep growing after big jump will continue as it saves money and helps attract
during COVID-19. employees, and related infrastructure has already
Retail Ecommerce Sales in USA been invested. As a result, there will be
$859.3 • demand for technology enablers (5G, platform,
$709.8 $765.2
$601.7 cloud service, electronic device) and employment
$523.6 Retail Ecommerce
of IT workers.
18.0% sales (billion)
14.9% 14.4% 15.5%
13.6% % Change • some shifts to suburban homes for WFH workers.
14.5%
11.0% 12.3% % of total retail
9.9%
7.8%
sales TELEMEDICINE
2018 2019 2020 2021 2022 Source: eMarketer, May 2020 • COVID-19 has migrated patients to telemedicine
• US expected 1billion online doctor visits in 2020 and
Netflix & Cinema (AMC) Stock Performance
200 Netflix expanded Medicare to cover online doctor visits.
150 • Ping An Good Doctor’s users grew 900% (Dec 2019
100 to Jan 2020) and is eyeing on ASEAN market
50 • Doctor Raksa, partnered with Bamrungrad, saw its
Percent

0 registered online users increased from 300K to 400K

-50 in April 2020 alone.
AMC
-100 • ASEAN has potential for telemedicine due to low
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
access to medical services. 14
Source: Nasdaq, NYSE
 CIRCULAR ECONOMY RENEWABLE ENERGY
Profits will be prioritized over the environment, Renewable energy becomes less attractive in
especially in developing countries. developing countries due to
• As e-commerce grows, large • Less subsidies due to public debt
Plastic waste from • Less competitive as prices for oil, gas, & coal drops
food delivery amount of waste from delivery is
created.
280M AUTOMATION
• Plastic waste from food delivery in
Thailand is predicted to doubled Slower move towards automation in developing
140M during COVID-19; one-time food countries due to
delivery produces 7 pieces of • Slowdown in demand
waste. • Stagnant labor wages
Pre- During • Post-COVID, demand new plastic • Excess production capacity
COVID COVID
containers may rise as their prices Thailand: Capacity utilization rate (Seasonally adjusted)
Source: TDRI, 2020
remain low with low oil price. 100 Motor vehicles
90
SHARING ECONOMY 80 Computer &
Electronic Products
70
Electrical equipment
Percent

• Fear of infection will be only temporary. 60

50 Rubber & Plastic
• Post-COVID, budget constraints will increase Products
40
demand for cheap sharing services. 30 Cap U
Apr-19
Jan-18
Apr-18

Jan-19

Jan-20
Apr-20
Oct-18

Oct-19
Jul-18

Jul-19
Source: Office of Industrial
Economics. 15
16