11 July 2024

The government should ease restrictions and reduce bureaucratic red tape to facilitate investment by foreigners, as a short-term measure to boost the sluggish economy, said Kirida Bhaopichitr, director of International Economics and Development Policy of the Thailand Development and Research Institute (TDRI).

She said that Thailand’s economic growth in the first quarter of this year was 1.5%, which is better than the 1% projection, but was the lowest among ASEAN member countries and low for a middle-income country like Thailand.

She said, however, that the Thai economy has the potential to grow by 2.5% for the whole year, thanks to investment by government sector, following the disbursement of the 2024 fiscal year budget.

Although exports shrank in the first quarter, it is forecast that they will rebound and expand by 1-2% year-on-year, in response to economic recovery in the US, the European Union, the Middle East and ASEAN. Exports in the first five months of this year grew by 2.6%.

Kirida admitted, however, that geopolitical uncertainties in the Middle East and the increased rivalry between the US and China remain major challenges for the Thai economy in the second half of the year.

Trade sanctions by the US and its allies, such as European Union, Australia and Japan, against China, including the increase in import tax on Chinese electric vehicles to 100%, will force China to dump its products into ASEAN countries, including Thailand, which will affect local industries, she said.

Amidst the external risks, she said there is, however, an opportunity. Thai industrialists should increase imports of raw materials and parts from China to produce their own goods for export or local consumption.

In the long-term, she said that Thailand should invest in the development of labour force skills, to keep pace with the advances in technology, such as robotics and automation systems, adding that development in digital infrastructure, such as high-speed internet services, is also essential in attracting “digital nomads” to work from Thailand.

She said the government must be financially prepared to invest in 6-G technology, which will become available in the next few years.