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The research house, Economic Intelligence Center under, reported closures of business spiked nearly 40 per cent from last year. From June to July, business closures hit 38.4 per cent year-on-year.
Due to the economic downturn amid the pandemic crisis, the EIC also anticipates higher figures in the second half.
According to the Economic Intelligence Center (EIC), a research house under Siam Commercial Bank, the business closure ratio increased by 37.9 per cent year-on-year for the first 18 days of August.
As of Aug 18, 2020, total business closures totalled 13,400 years to date.
Business closures grew by an average of 38 per cent for 2.5 months and the ratio is expected to rise in inch in the second half of the year, said Yunyong Thaicharoen, EIC's first executive vice president.
Tourism and hotel businesses are hit hardest.
Sectors affected mainly announcing closures were mainly hotels and businesses related to tourism, textiles and the automotive industry, Mr Yunyong said.
Business closure publications lag in an economic downturn, so they should keep on progressing in line with the negative economic outlook this year, he said.
"We can't predict the [business closures] rate later this year because it requires analysis with updated data, but the rate is expected to rise two-digit," Mr Yunyong said. Business closures also produce a higher rate of unemployment.
Thailand's unemployed workers totalled 745,000 in the second quarter, a near double-digit increase over the corresponding period last year. In the quarter of April-June, the country's unemployment rate increased to 1.95 per cent, a record high since the first three months of 2009, according to the EIC.
The services sector, hotels and restaurants have seen the most unemployment as they have been reeling from the outbreak, especially businesses that rely on external demand and foreign tourists.
Restaurants and hotels show the highest unemployment rate
In the second quarter, the amount of unemployed people in the hospitality and restaurant businesses was around 84,000. While other services companies stood at 91,000. At the same time, the highest unemployment rate in hotels and restaurants was 2.9 per cent. Construction and electronics followed by 2.8% at 2%.
Mr Yunyong said the unemployed are largely made up of graduates aged 15-24.
This is the key risk element, that shows 324,000 people unemployed. Equivalent to 98.2 per cent of total second-quarter unemployment, up from 209,000 in the first quarter, he said. In the second quarter, the youth unemployment rate was 8.6 per cent.
Underemployment has also increased because of fewer hours for full-time and overtime workers. In the second quarter work, hours per week declined to an average of 38.1 hours.
"The pandemic scares the economy, particularly with the closures of the businesses and unemployment. Underemployed and furloughed workers could reach 3-5 million in the coming period with a vulnerable labour market, "Mr Yunyong said.
Higher household debt in Thailand is yet another symptom of the recovery stalled. The ratio of Thailand's household debt-to-GDP could rise from 80.1 per cent in the first quarter to 88-89 per cent at year-end, the EIC said.
This year the EIC downgraded its prediction of GDP contraction from a 7.3 per cent decline to 7.8 per cent. – The Bangkok Service