Sirikanya warns govt of economic woes next year

An economic expert in the opposition People’s Party has warned the Pheu Thai-led government to step up proactive economic measures as Thailand is likely to be hit with economic woes mainly because of intensified trade wars.

PP MP Sirikanya Tansakun said the country’s economy was expected to worsen because of several uncertain factors while the boosting factors for this year’s growth would not help the economy much next year.

Sirikanya was giving an interview to Krungthep Turakij’s “Deep Talk" video programme on YouTube.

“The year 2025 will be full of uncertainties while the helping factors for 2024 will lose momentum one by one,” Sirikanya said.

“So it will be a big problem for the government to keep growth in line with the country’s potential or to increase potential to expand growth.”

She said it was worrying to see the government using only defensive measures without proactive measures for short-term and long-term economic situations.

Worse still, she said it took longer than expected for the government to implement its pre-election policies, such as the digital wallet scheme, restructuring of household debt and development of labour skills.

Sirikanya also called on the government to get prepared for a worsening economic situation next year by reforming the tax structure to be able to collect more taxes. She noted that currently collected taxes were only 14% of gross domestic product.

Sirikanya said economic woes would worsen mainly because of intensified trade wars after US president-elect Donald Trump takes office early next year. She said that not until Trump formally takes office will Thailand know how much it will be affected by the new US government’s trade-barrier policies.

She said Trump has vowed to raise import duty on goods from China, Mexico and Canada to 60% and from other countries to 10-20%. Sirikanya said that although the US government might not raise import duty as much as threatened, it would still do so to some extent.

As a result, she said, the Thai commerce minister should negotiate for import-duty exemption or reduction when he makes an official visit to the US in February.

She noted that although a US-China trade war could prompt Chinese manufacturers to move their bases to Thailand, the US government will still target the Chinese firms in Thailand, as happened to Chinese manufacturers of solar panels that were still facing a 22% tariff after they moved their bases to Thailand.

Sirikanya said tourism would not help much to boost the economy next year because tourism was expected to slow down now that the number of foreign tourists is already near the pre-Covid level.

She explained that before the Covid-19 pandemic, foreign tourists numbered about 39 million a year, and 2024 would already return to 35 million foreign arrivals.

Sirikanya added that private consumption would not help the economy much next year either.

She said that in 2024, private consumption expanded by 7% in the first quarter and gradually dropped throughout the year. Next year, consumption would expand by 3-4%, so it would not help much to revive the economy.