Despite recovery trajectory, Thailand’s economy expected to face challenges next year, experts tell seminar
Economists, high-ranking officials and business leaders together shared their perspectives on the best practical strategies and solutions for Thailand's economy to survive and thrive.
They expressed their opinions during the "Thailand Economic Outlook 2023" event hosted by Krungthep Turakij newspaper on Tuesday in Bankgok to commemorate its 36th anniversary.
The dialogue began with a keynote speech from Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput, who stated that despite the global economic slowdown and high volatility in the financial market, Thailand's economy is gradually recovering due to a strong rebound in the tourism industry and domestic consumption.
However, he noted that high inflation and the US central bank's monetary policy were still factors that Thailand needed to monitor closely.
He also defended the BOT's monetary policy, claiming that it is on the right track because Thai economic conditions differ from those of other countries, hence Thailand did not need to adopt the same measures.
"Thailand's economy requires a smooth takeoff rather than a smooth landing," said Settaput.
He predicted that volatility and uncertainty would become a normal part of doing business, so companies and agencies must be much more alert and resilient in the short term while still focusing on their long-term vision.
"None of the events are predictable," he explained. "In this new world order, companies should focus on four key strategies: customer centricity, resilience and agility, a disciplined financial approach, and diversification."
He warned businesses to brace themselves for several headwinds in 2023, such as the European energy crisis, the ongoing war in Ukraine, China's slowdown, rising global inflation, and currency depreciation.
He advised businesses to invest in people and Environment, Social, and Governance (ESG) in order to sustain their growth because these two factors will help businesses reduce risk and costs in the long run.
Overall, Thailand's economy will face more severe challenges in the coming year, particularly for monetary and fiscal policy, three economists from major banks and financial institutions said.
They attributed the situation to the US Federal Reserve's commitment to bring down high inflation regardless of the risk of a hard recession.
Supavud Saicheua, economist and adviser at Kiatnakin Phatra financial group, pointed out that although the country's economy is showing positive signs of growth, Thailand needs to improve its foundation and infrastructure, including embracing rapid changes in innovation and technology and caring more for the environment, in order to thrive in the long run.
Meanwhile, Bangkok Bank economist Kobsak Pootrakool is concerned about the country's reserves, which needed to be increased to improve efficiency but not so much that the country cannot move forward. He urged both the public and private sectors to become more competitive.
Kiatipong Ariyapruchya, the World Bank's senior economist for Thailand, added that the government should relax some finance and investment regulations.
Thailand has one of the toughest investment laws in the Southeast Asian region, he added, urging the government to amend the law, which would aid in unlocking Thailand's manufacturing and services potential.
He also suggested that the Thai government develop a strategic plan to address the effects of extreme weather conditions, specifically water management and drought.
Despite the country's difficult circumstances, two private-sector representatives were optimistic that Thailand's economy will be able to handle and survive because Thailand's private sector is capable and strong.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said that what is needed now is to find new business models — other than export and tourism — to drive Thailand's economy.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said that their federation focuses on seven new S-curve industries, including Bio Circular Green economy and climate change.
He insisted that S-curve will open up new opportunities for Thai businesses and help attract foreign investment in the coming years.
Sanan and Kriengkrai also had a message for the next government. They assured that regardless of which party forms the new government, the private sector is always willing to collaborate and work with them. They urged the next government to pay close attention to what businesses need, to change some outdated regulations, and to be consistent.
Thailand, she claimed, had the most advanced infrastructure in the region. Many foreign investors continue to prioritise Thailand. Hence, the country must continue to invest and develop, particularly in mega-trends such as electric vehicles, renewable energy, and green economy.
The tactic, she explained, is simply to be mindful and sincere with customers, employees and business partners. Besides, she suggested that thinking outside the box, creating new possible business paths, and expanding network and connections would be useful strategies in this new business context.
