Structural changes key to push Thai economy beyond 3%: BOT governor
The country’s industrial sector must focus on structural and technological changes if it is to draw investment
Thailand needs to change its economic structure to focus on investment and new technologies in order to push economic expansion to meet the government’s target of 5% year on year, Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput said on Thursday.
The governor was speaking at a meet-the-press event on Thursday at the Bank of Thailand Learning Centre in Bangkok, the first time in several months he has given an interview to the press.
“Currently our economic growth potential is around 3% year on year, and the government's stimulus measures alone are unlikely to help it expand beyond this margin,” he said.
Sethaput said Thailand’s industrial sector is facing increasing competition from overseas manufacturers because its existing technologies are not able to cope with global trends.
Thailand’s current technologies are limited to outdated industries such as hard disk drives, textiles, petrochemicals and iron, he added.
Sethaput added that economic growth must also be supported by a high-quality and adequate workforce. This poses another challenge to Thailand as the country is becoming an ageing society with fewer working people.
“Thailand’s economic recovery is now far slower than that of the global economy, therefore we must push for structural changes in our economic system as soon as possible,” he said.
He added that the Bank of Thailand will continue to use financial policies to keep the inflation rate flexible and within standards, to ensure that the Thai economy can grow steadily.
“Inflation is not the only indicator to adjust the interest rate. We need to also consider the economic situation and financial stability,” he said.
The BOT estimates that inflation in the second half of the year will expand 1.1%, and by 0.6% for the whole year.
“The current policy rate (at 2.5%) is suitable for the situation that the BOT is looking at. However, we are ready to revise the rate if there is a significant change in inflation or economic recovery,” he said.
