11 July 2024

The Thai government should adopt policies and measures to adjust economic management measures and directions to align with global changes and challenges, said Parnpree Bahiddha-Nukara, former Deputy Prime Minister and Foreign Minister.

In his keynote speech, “The Direction of the Thai Economy” on Thursday for the 27th anniversary of the National Press Council, he reiterated that Thai economic policies must also be flexible and adaptable to changes.

Parnpree added that the global economy remains volatile since the financial crisis in 2008 and the impact of COVID-19 in 2020.

He pointed out that after 2020, global trade and investment have not fully recovered, exacerbated by the ongoing Ukraine-Russia war and the Israel-Palestine conflict.

Furthermore, technological disruption, global warming, and geopolitical tensions have impacted global trade and investment, prompting businesses to adjust their strategies and global supply chains due to production base relocations.

Thailand relies on exports for more than 70% of its GDP and has substantial income from foreign direct investment (FDI).

However, global economic changes have led to challenges in exports and foreign investments, which have been the main drivers of the Thai economy, resulting in production base relocations out of Thailand, according to Parnpree.

He stated that the domestic economy is facing increased public debt, now at 65.05%, limiting government spending.

Meanwhile, household debt is expected to rise to 91.4% of GDP by the end of 2024, affecting domestic consumption.

Furthermore, he reiterated that political instability, with frequent changes in government, has disrupted national development policies.

Thailand’s economy also faces external volatility factors, such as inflation rates, exchange rates, energy costs, and international trade barriers, all impacting the competitiveness of Thai businesses.,

Parnpree, who was a former trade representative, has some recommendations to boost the future of the Thai economy.

Economic policies, he added, must respond to global economic changes.

For example, the Ukraine-Russia war has caused shortages of products imported from these countries, presenting an opportunity for Thailand to export substitutes.

Similarly, in the so-called chip war between China and the US, Thailand could attract investments in semiconductors or related industries to address the changing geopolitics and global supply chains.

However, he praised the country’s vision for economic development which is moving in the right direction, such as transitioning to a digital economy, Industry 4.0, and expanding the Eastern Seaboard to the Eastern Economic Corridor (EEC).

However, he warned these policies lack clear supporting measures and up-to-date regulations.

While transitioning to a digital economy and a green and clean economy, it is not feasible to completely abandon old industries for new ones.

There must be a systematic process to transform old industries while promoting new ones.