10-7-2024 (BANGKOK) Thailand’s Finance Minister, Pichai Chunhavajira, candidly acknowledged the country’s economic struggles during a business seminar on Wednesday, July 10th. He noted that the Thai economy has been stagnant for an extended period, with growth deteriorating as it faces structural problems.
Pichai expressed the government’s determination to lift economic growth to 3 percent this year, a significant improvement from the current projections of around 2.5 percent. He emphasized that this level of growth is low compared to the rates of close to 6 percent achieved in the past.
Southeast Asia’s second-largest economy expanded by a mere 1.9 percent last year, lagging behind its regional peers. The country has grappled with weak exports, high household debt, and rising borrowing costs, all of which have contributed to the economic slowdown. Over the past decade, Thailand’s average economic growth has been a meager 1.73 percent.
Acknowledging the challenges, Pichai highlighted the crucial role of the tourism sector in driving the economy forward. He expressed optimism that at least 35 million foreign tourist arrivals would be recorded this year, a significant boost compared to the record of nearly 40 million visitors in 2019, before the pandemic.
However, the Finance Minister also pointed out the pressing issue of household debt, which currently stands at over 90 percent of the country’s gross domestic product (GDP). He stressed the urgency of addressing this matter amid rising levels of bad loans.
Pichai revealed that he was hoping the central bank would relax loan-to-value regulations for mortgages, a move designed to support the property sector and stimulate economic activity.
The Finance Minister’s candid assessment and proposed measures underscore the government’s recognition of the economic challenges facing Thailand. The country’s structural problems, coupled with external factors such as global trade tensions and fluctuating commodity prices, have contributed to the economic slowdown.
Experts and analysts have welcomed the government’s acknowledgment of the issues at hand and its commitment to implementing measures to revive the economy. However, some have cautioned that addressing structural problems and reducing household debt will require a comprehensive and long-term approach, involving targeted policies and reforms.
