Ageing Thailand will see ‘social-welfare costs rise to 1 trillion baht in 2033’
The rising number of elderly people requires an increase in government spending to care for them, while the tax revenue from the working-age population faces downward pressure.
The Fiscal Policy Office projects that social-welfare expenditures will reach 1 trillion baht in 2033, due mainly to the rising cost of caring for the elderly as Thailand’s population continues to age.
The rising number of elderly people requires an increase in government spending to care for them, while the tax revenue from the working-age population faces downward pressure.
Finance Ministry deputy spokesperson Pornchai Thiraveja said the number of births in Thailand has been falling since 2013.
This can slow economic growth and reduce the amount of tax revenue the state collects, said Pornchai, also an advisor to the ministry’s Fiscal Policy Office.
The cost to the state of caring for the elderly has risen 5.15% over the past five years, he said. This includes pensions, healthcare for seniors, and other state-welfare benefits.
As the cost of caring for the elderly rises, the government needs to address the looming imbalance between spending and tax revenue, Pornchai said.
Overall, the cost of social-welfare projects has risen from 509 billion baht in fiscal 2018 to to 706 billion baht in fiscal 2023, he said.
This trend will continue due to Thailand’s rapidly ageing population and social-welfare expenditures will cost 1 trillion baht in fiscal 2033, Pornchai said.
He listed several measures the government can take now to alleviate budgetary pressure.
Encouraging workers to save more for retirement can help lower costs and help the state better manage rising social-welfare costs and focus on those most in need, he said.
Encouraging people to get health insurance and take care of themselves, while ensuring adequate medical facilities for seniors can help increase the number able to work, he added.
Senior citizens in their 60s who remain healthy can be encouraged to find jobs, while incentives, like income-tax deductions, encourage employers to hire them, Pornchai said.
The government should set up a unit to study and report on the ageing society and its economic impacts, he said. European countries, the United States and other developed countries with ageing populations have government bodies that study ageing and provide advice on how to deal with its impacts.
