The impact of e-commerce on Thai’s economy and its role plays in driving economic recovery after COVID-19 pandemic – the CGE Analysis

Montchai Pinitjitsamut, Nithicha Thamthanakoon and Sophon Yaemklin

MPRA Paper from University Library of Munich, Germany

Abstract: This research study aims to analyze the impact of e-commerce on Thai’s economy and its role plays in driving economic recovery after COVID-19 pandemic by using the CGE simulation analytical model. Since the COVID-19 epidemic on the global and Thai economy, the International Monetary Fund (IMF) predicts a decline in global economic growth due to the pandemic control measures, rehabilitation with vaccines, and financial terms. Thailand has also experienced the impact of the COVID-19 epidemic for approximately one year, which has affected its economy, society, and environment. The government has implemented various measures and policies, including temporary closures and work from home, resulting in a decrease in trade, investment, and tourism. This has led to changes in economic activity, with electronic transactions growing due to the use of technology, which reduces the need for in-person contact. Overall, the pandemic has altered the way people conduct their daily transactions and has resulted in a significant change in living patterns in Thai society. The research findings indicate that the COVID-19 pandemic has significantly impacted the Thai economy with slow recovery. This study indicates that expanding e-commerce transactions could positively impact the economy, but only if it reaches a certain threshold of at least 25% of the predicted growth rate. In comparative analysis, the scenarios with a significant expansion of e-commerce transactions in five sectors of the economy would have had a different impact on the economy. In scenarios B and C, the economy has recovered rapidly, with real GDP growing at 91.81% and 79.81%, respectively, and a significant increase in investment. Scenario C has seen a contraction, but there has been an increase in exports, with overall household income and consumption increasing and government tax collection increasing significantly. Sectors with a low export base, such as construction, transportation, and technical and professional services, would benefit the most. Therefore, e-commerce plays a crucial role in driving the economy towards a more agile and faster recovery than the pre-pandemic period. The policy implications should be initiated are 1). Enhance the accessibility of e-commerce transactions to low-income households. 2). Promote more investment in digital infrastructure to expand e-commerce transactions across sectors. 3). Encourage businesses to adopt e-commerce by providing incentives such as tax breaks and subsidies for investments and 4). Provide training and support to improve people’s digital capabilities.

Keywords: E-commerce; COVID-19 pandemic; Economic recovery; CGE Analysis (search for similar items in EconPapers)
JEL-codes: C68 O11 (search for similar items in EconPapers)
Date: 2023-01-17, Revised 2023-04-10
New Economics Papers: this item is included in nep-sea
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