Low birth rate a looming threat for Thai economy
A low birth rate in the coming years could affect Thailand's financial stability because of the increasing number of senior citizens, the Fiscal Policy Office (FPO) under the Finance Ministry said on Wednesday.
FPO director Pisit Puapan said that by 2040, the population of old people would grow to 20.4 million from 12.2 million at present, and the employment workforce (people aged 15-59) would shrink to 36 million from the current 43 million.
Citing a government forecast, Pisit added that Thailand would enter the aging society era by 2025 when there would be 14.5 million people older than 60, or 20.7 per cent of the entire population.
In 2020, 540,000 babies were born, lesser than the 560,000 people who died. Last year also saw the ratio of the workforce to total population fall from 3.5:1 to 0.6:1.
If such a ratio persists, the dependency rate of old people on the workforce will rise to 56.2 per 100 by 2040, from 28.4 per 100 last year.
Continuous changes in the population structure of Thailand would result in a drop in aggregate productivity, a quick rise in the daily minimum wage, and subsequent inflation, Pisit explained.
Those changes would also cause a demand-supply problem if old people get poorer and see a drop in their buying power. The savings situation as a whole would also be affected when old people spend more of their savings.
Pisit said short-term solutions to the population balance problem could be solved through reforming the workforce, by enhancing the skills of the workforce to increase productivity, while increasing the number of female workers to compensate for a loss through retirement.
The other solutions include the improvement of tax collection as well as increasing certain existing taxes. Promotion of savings should be implemented for people under tax-enforced employment and out-of-system works.
In a relevant development, the Department of Health said government measures to boost the birth rate include reducing the cost burden on the married couples having children newborn to five years old, as well as setting up of a centre to develop motor and cognitive skills of children younger than two years old.
Director-general Suwannachai Watthanayingcharoenchai said the other measures were: encouraging people to marry and have children, and assistance to people with reproductive difficulties.
