The global economic slowdown could cost Thailand a million jobs early next year and output will be slashed, the Federation of Thai Industries (FTI) said on Monday. “I think industries will cut their production by 20-30 per cent and about 900,000 to 1 million jobs will go in the first quarter,” Thaveekij Jaturajarernkul, an FTI vice chairman, said.

“The impact on exports will clearly be felt from early next year,” he said, adding the garment, furniture and electrical parts sectors were likely to suffer because of weak consumption.

That would make it difficult for new entrants to the workforce — about 700,000 each year — to find jobs, he said.

The workforce in Thailand numbers 20 million, most in agriculture but around 5.7 million in non-agricultural jobs.

Thanit Sorat, another FTI vice chairman, noted that the global financial crisis came on top of protracted political unrest at home, which had already hit tourism.

Unfavourable economic conditions would make banks more cautious about lending and that would be a big problem for small and medium-sized businesses, Thanit said.

“The economy next year, although we don’t expect a recession, is likely to slow down sharply,” he said, adding the FTI forecast economic growth of 3.8-4.0 per cent at best next year, down from the 4.5 per cent it projected for 2008.

The Bank of Thailand has forecast 2009 economic growth of 3.8-5.0 per cent, against projected 4.3-5.0 per cent this year and 4.8 per cent in 2007.

The central bank expected export growth to be 7-10 per cent, down from the 20-23 per cent projected for 2008.

Thanit said the FTI had asked the government to try to boost investor confidence and ensure there was sufficient liquidity in the financial system.

Thailand has said it has no liquidity problems. Deputy Prime Minister Olarn Chaipravat said last week the problem was how to make banks lend and investors borrow in order to get the economy going.

Another FTI official, Sommat Khunset, said conflict on the Thai-Cambodian border had affected border trade and tourism as the number of Thai tourists visiting Cambodia had fallen sharply.

“There’s not a problem yet for the manufacturing sector but trade and tourism have already seen some impact. Thai investors are also reluctant to invest there,” Sommat said.

source: Economictimes

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