The government should ease restrictions and reduce bureaucratic red tape to facilitate foreign investment as a short-term measure to boost the sluggish economy, suggested Kirida Bhaopichitr, director of International Economics and Development Policy at the Thailand Development and Research Institute (TDRI).
Thailand’s economic growth in the first quarter of this year was 1.5%, surpassing the 1% projection but still the lowest among ASEAN member countries, and below expectations for a middle-income country like Thailand, Kirida noted. However, she expressed optimism that the Thai economy has the potential to grow by 2.5% for the entire year, driven by government sector investment following the disbursement of the 2024 fiscal year budget.
Despite a contraction in exports during the first quarter, a rebound is anticipated with a forecasted expansion of 1-2% year-on-year, aided by economic recoveries in the US, the European Union, the Middle East, and ASEAN. Notably, exports in the first five months of this year increased by 2.6%.
Kirida acknowledged the significant challenges posed by geopolitical uncertainties in the Middle East and the escalating rivalry between the US and China, which are likely to impact the Thai economy in the second half of the year. Trade sanctions by the US and its allies, including the European Union, Australia, and Japan, against China—such as the increase in import tax on Chinese electric vehicles to 100%—are expected to lead China to offload its products into ASEAN markets, including Thailand, potentially harming local industries.
However, Kirida highlighted a silver lining amidst these external risks. She urged Thai industrialists to seize the opportunity by increasing imports of raw materials and parts from China to produce goods for export or domestic consumption.
Looking at the long-term, Kirida stressed the need for Thailand to invest in developing labor force skills to keep pace with technological advancements such as robotics and automation systems. She also emphasized the importance of enhancing digital infrastructure, including high-speed internet services, to attract “digital nomads” to work from Thailand.
Furthermore, she advised that the government must be financially prepared to invest in emerging technologies like 6-G, which is expected to become available in the next few years.
Excessive mention of officials and other people in attendance were not included in the primary discussion to maintain the article’s focus on economic recommendations and forecasts.
