Thailand at risk due to govt’s financial mismanagement: TDRI chief

The president of the Thailand Development Research Institute (TDRI) has warned that Thailand could soon suffer an economic crisis as the Pheu Thai-led government lacks financial discipline.

TDRI president Somkiat Tangkitvanich was speaking at the “World Economic Pulse to Turn Around Thailand’s Economic Crises in 2025” seminar held on Wednesday at the Bangkok Marriott Marquis Queen’s Park Hotel. The event was organised by the Senate committee on economic, monetary and fiscal affairs.

Urging the Senate panel to closely monitor the government’s actions, he said it is surprising that the country has not already entered a crisis, because the government is struggling with macroeconomic management and lacks monetary discipline.

“The government thinks it has free access to money, but the world is full of risks that require emergency funds,” he said, pointing to the potential need for additional funds to address natural disasters, pandemics and geopolitical challenges.

Somkiat cautioned that the government’s disregard for financial discipline could lead to increasing public debt, which he predicted could rise from the current 10% GDP ratio to 15% within a few years.

While Thailand enjoys a BB+ credit rating, its public debt ratio is already higher than that of some countries with lower credit ratings, which could result in a downgrade and higher borrowing costs for the private sector, he said.

Somkiat also warned against any government interference in the central bank’s monetary policies, citing the risk of triggering an economic crisis as seen in certain foreign countries.

His remarks come amid the appointment of former finance minister Kittirat Na-Ranong as chairman of the board of directors of the central bank. His close ties to
the ruling Pheu Thai has raised concerns about potential government intervention in the central bank’s affairs.