11 July 2024

Thailand needs to develop its human resources, improve the quality of its education, and get serious about addressing the inequality gap, says economist, Dr. Somjai Phagaphasvivat. He said that dealing with these issues is the long-term solution for the Thai economy.

“What has been problematic for a really long time, and has been widely exposed by COVID-19, is the inequality gap. The government has to be serious about this. If we don’t fix this, household debt will rise even further. (It is) the highest in ASEAN and second highest in the Asia Pacific,” said Dr. Somjai.

He said that the issue of household debt has been growing for years and the government cannot let it become a tipping point.

As for the short-term solutions for this, post-pandemic, Dr. Somjai said the government has to prepare enough vaccines for next year. There must also be more stimulus measures, which will help reduce the amount of rehabilitation needed.

Rehabilitation, however, remains necessary and should be provided to people who have been affected for the longest time.

He said that the Thai government has all the tools it needs to revive the economy, it just has to maintain very good fiscal discipline.

Thai household economy improves but remains fragile for rest of the year

Thailand’s household economy has improved but will remain fragile for the rest of the year, due to a combination of flooding, rising energy prices and uncertainty over the COVID-19 pandemic, although Economic Condition Index (ECI) for September has improved from August, according to the Kasikorn Research Center’s ECI report.

Dr. Somjai believes the worst of the COVID-19 pandemic is over and that the world is on the path to recovery, which will improve the tourism industry next year. Recovery, however, takes time, so Thailand should focus on domestic tourism, which could grow 80-90% with a boost.

He also said that, if the government had not rolled out the relief schemes, last year’s economy would have been even worse.

“We have to admit that these relief schemes have helped to improve GDP by no less than 1 to 2%, but this is not all. The relief is one part, the stimulus scheme is in addition. There are things that have led to some spending, so I think it has helped. If the government hadn’t done this, last year’s economy would have been even worse than it was,” Dr. Somjai explained.

In the end, what we really need is to improve our human resources and be serious about reducing the inequality gap, otherwise, Thailand will easily keep falling into economic downfall because our structure is not strong enough.

by Tulip Naksompop Blauw