Amid forecasts of the worst recession in 300 years, Chancellor of the Exchequer Rishi Sunak is drawing up options to bolster the economy as the government withdraws its vast package of financial support in the months ahead, according to people familiar with the matter.

For Johnson, the priority will be to focus on reasserting his broader political mission in the age of the virus, one person said. The Conservative Party leader and public face of Brexit, Johnson was elected with a large majority just six months ago on a promise to “level up” the forgotten parts of the country.

Yet his plans have been derailed by the global pandemic, with his government’s agenda put on ice as the coronavirus crisis took over. For Johnson and his administration, which is already facing criticism for its response to the public health emergency, minimizing the economic hit will be vital to its hopes of reelection by the time the next election is held in 2024.

The U.K. has already spent $70 billion (56 billion pounds) on virus support measures since the crisis hit in mid March, and is now paying the wages of 8.7 million jobs, according to figures released on Tuesday.

Work has begun on preparing for Johnson to set out a key speech, expected at the end of June, one person said.

On Monday, Health Secretary Matt Hancock promised more details on the “economic response” later this summer after he was asked about government preparations for a recession amid fears of bankruptcies and job losses.

“The economy’s going to have to change,” Hancock told the government’s daily virus briefing in London. “We’re going to have to be a different type of economy as we come out of this and you’re going to hear more of that from the chancellor and the prime minister, who’ve been working so hard on this, in the weeks and months to come.”

Officials privately confirmed work is underway on a fiscal event but said it is too early to be precise about the detailed policy proposals, or about the date, though one person said it is likely to be in July.

Among the questions that have been discussed among Johnson’s allies include whether there is potential to raise income tax or national insurance specifically to pay for investment in the National Health Service. Business taxes may also rise, as internal polling suggests there is public support for increases in corporation tax.

Other options could include a windfall tax on sectors that have profited during the pandemic — such as supermarkets or technology companies, one person familiar with discussions said.

Sunak, who has spent unprecedented amounts supporting the U.K. economy during the coronavirus crisis, kept the spending taps firmly on last week as he announced plans to taper his job support program, unveiling an incremental withdrawal in a bid to avert a mass wave of unemployment this summer.

The self-employed will be offered a grant of as much as $8,205 (6,570 pounds) in August to cover another three months of earnings, while furloughed workers will continue to receive 80% of wages through October. Employers will only start taking the burden of their National Insurance and pension contributions in August, before paying 10% of workers’ wages in September, and 20% the following month, the chancellor said.

The two jobs’ plans are currently supporting 10.7 million jobs, and have come at a cost of almost 22 billion pounds. The cost of both programs could easily breach 100 billion pounds, about 11% of total government spending in a normal year and equivalent to the amount spent on the National Health Service, according to the Institute for Fiscal Studies.

The Transport Ministry’s permanent secretary Chaiwat Thongkamkoon said the proposals are designed to support mega projects that will be in operation soon, such as the high-speed train network linking the country’s three main international airports.

The proposed projects for the second phased, estimated to cost Bt252 billion, will be developed between 2022 and 2027, and will also include the projects in the first phase that cannot be completed next year.

He added that the meeting had ordered related agencies to review the budget of their projects in the second phase in order to save development costs. The revision will be submitted to the EEC Policy Committee next month to seek funds.

The projects for the second phase include a tram network in Pattaya, which will be linked with the high-speed trains linking the three airports.

The first decree empowers the Finance Ministry to borrow Bt1.1 trillion to revive the economy after the toll taken on business by the Covid-19 pandemic.

The second decree will trigger soft loans of Bt500 billion for small and medium sized enterprises (SMEs) hit by the outbreak.

Spending under the third decree is aimed at stabilising the country’s financial system and economic security.

Related story: MPs push Bt1.9-trillion Covid-19 aid package through Parliament

Total transactions amounted to Bt70.987 billion with an index high of 1,374.29 and a low of 1,357.23.

During the morning session, a stock analyst at Krungsri Securities said he expected the index to fluctuate between 1,345 and 1,365 points due to uncertainty over renewed tensions after China suspended imports of soybean in response to United States’ threat to terminate trade ties with Hong Kong.

“Thailand’s political situation and tight SET valuation will also pressure the index,” the analyst predicted, citing the fact that 18 members of the core coalition party Palang Pracharat’s board members had officially resigned on Monday.

He added that energy and petroleum stocks continued to gain from positive sentiment over rising crude oil, as investors expect the economy to recover after several countries have eased their lockdown measures.

The top 10 stocks with the highest trade value today were AOT, KTC, KBANK, PTT, GULF, BBL, PTTEP, GPSC, PTTGC and BGRIM.

As of 4.30pm, crude oil price rose by US$0.90 or 2.54 per cent to $36.34 per barrel, while gold rose by $0.60 or 0.03 per cent to $1,750.90 per ounce.

The global indices were on the rise:

Japan’s Nikkei Index closed at 22,325.61, up 263.22 points, or 1.19 per cent.

China’s Shanghai SE Composite Index closed at 2,921.40, up 5.97 points, or 0.20 per cent, while Shenzhen SE Component Index closed at 11,112.50, up 10.35 points, or 0.093 per cent.

Hong Kong’s Hang Seng Index closed at 23,995.94, up 263.42 points, or 1.11 per cent.

South Korea’s KOSPI Index closed at 2,087.19, up 22.11 points, or 1.07 per cent.

Taiwan’s TAIEX Index closed at 11,127.93, up 48.91 points, or 0.44 per cent.

TCC chairman Kalin Sarasin said the private sector was still concerned about unemployment caused by Covid-19 and government restrictions that had hit businesses. Many methods were being used to keep businesses open, including reducing salaries, automating human jobs, and staff layoffs, he said. Meanwhile a TCC survey conducted two months ago found that the virus crisis may push unemployment up to 7 million, though the National Economics and Social Development Council (NESDC) projects up to to 8.4 million will be jobless and 2 million will be unemployed all this year.

To tackle the problem, the TCC has partnered with Accenture Thailand to launch the “People + Work Connect” platform. Launched today (June 2), the platform’s first phase links workforce data from different companies to form a pool of labour to match their needs. So far, 29 corporations have joined the project, which helps to slow down unemployment and provide opportunities to laid-off workers.

Kalin added that the private sector is worried about what economic shape Thailand will be in once the virus crisis is over. As such, the TCC has gathered concerns and suggestions from businesses as a basis for consultations with all government agencies. The key challenge, he said, is finding a new strategy to pave the way for Thailand, since Covid-19 had changed everything. The government must review its national strategy, ranking plans and guidelines according to new priorities and rethinking national spending.

However, the private sector is confident the economy will improve in the the second half of 2020, as the government start to unlock the business lockdown. About 90 per cent of private and state enterprises would reopen, to drive purchasing power and investment again. But GDP this year is still forecast to shrink by 5 per cent.

The TCC estimates total revenue in the economy is now around Bt100 billion while the third phase of lockdown easing should double that figure. The chamber believes that if the number of new virus cases remains low and the state gradually allows remaining businesses to reopen, businesspeople and investors from Japan, China, the United States and Europe will return to boost the Thai economy.

“The ‘unlocking’ period has two parts. In the first, some businesses need to be opened fully and fast while the others need to be opened more gradually according to virus preventive measures and numbers of new cases. The private sector considers that any business equipped with standard protection should be opened, especially for investors and foreign workers,” said Kalin.

He added that the curfew should remain to prevent a second-wave outbreak, but its hours should be gradually cut.

Supawan Tanomkieatipume, president of the Thai Hotels Association, said that hotel revenue had dropped to zero during the pandemic outbreak. About 90 per cent of hotels had closed temporarily, which had affected 1.6-1.7 million staff. Hotels are expected to reopen in July but operate at only 30-40 per cent capacity to comply with government measures, for which hotels must bear the cost.

“Seventy per cent of Thailand’s tourism revenue comes from foreign tourists, while 30 per cent is domestic. In 2019, there were 38 million tourists yielding revenue of about Bt12 trillion. That figure is expected to fall by more than half this year. But we should see clear [positive] results from the government’s stimulus measures in the fourth quarter,” said Supawan.

Though Thailand’s first quarter GDP fared better than expected, the economy during the remainder of the year is expected to see a sharp contraction, with rising unemployment, assistant managing director Nattaporn Triratanasirikul said at press conference today (June 2).

Meanwhile, the overall global economy remains a concern given the high level of Covid-19 infections reported daily and thorny US political issues, both domestic and international, KResearch said while cutting its 2020 GDP projection to minus 6 per cent.

A KResearch survey using a random sampling of 1,000 Thais shows that the respondents are worried about looming uncertainties and this has prompted them to boost savings and tighten spending even more.

As evidenced, household spending has contracted more sharply than the previous estimate, KReasearch said. However, because the level of public debt is not presently a cause for concern, the government still has sufficient fiscal resources to assist ailing businesses after the lockdown has been eased.

The tourism, automotive and property industries are three important sectors that will require more time to recover than others, said Kevalin Wangpichayasuk, another KResearch assistant managing director.

In terms of employment, the government may need to focus its relief measures on the tourism industry, with priority being placed on the most affected travel-related businesses and workers, because the sector employs as many as 4 million people, KResearch said. Overall, major Thai businesses may take more than a year to recover to their pre-Covid-19 levels, it warned.

The Bank of Thailand’s monetary policy is another important tool that could prove useful in case the situation worsens, and there is leeway for further reduction of the policy rate. Nonetheless, the current situation has not yet hit a level that would require the implementation of a negative interest rate policy, KResearch added.