Finance Ministry conducting fitness test on Thai economy
The Finance Ministry will analyse Thailand's economic figures thoroughly as the country prepares to ramp up government spending in the new budget to kickstart its faltering economy.
Meanwhile, the National Economic and Social Development Council (NESDC) will conduct a health check on the economy, examining household debt, people's income, and the business potential of small and medium-sized enterprises.
The moves come after the Cabinet approved a fiscal 2024 budget with government spending of 3.48 trillion baht, a jump of 9.3% from the previous budget.
Thailand’s economy has slowed this year, expanding just 1.9% in the first nine months, according to the NESDC. Third-quarter GDP growth slowed to 1.5% from 1.8% in the second quarter. Industrial production also fell in Q3.
Thailand's GDP is expected to grow 2.5% this year compared with 2.6% last year. Inflation is forecast to remain at 1.4%, while the current account balance is expected to exceed 1% of GDP.
The World Bank predicts Thailand will see some of the lowest economic growth in ASEAN over the next 20 years as the country’s population ages and private investment slows. Without economic reform, the Thai economy is expected to grow at just 3% per year over the next two decades.
PM Srettha Thavisin’s Cabinet must focus on seven issues to stimulate sustainable growth, the NESDC says:
- Economic policies should be based on conditions and risks, with policies spaced out to handle potential downsides. The NESDC has already raised concerns over the 560-billion-baht digital wallet policy pledged by coalition leader Pheu Thai.
- Measures that take advantage of geopolitics, climate change, economic slowdown in major economies and volatility in the global capital market. Focus should be on Middle East conflict that could affect the labour market, volatile prices for energy and consumer products, and agricultural costs.
- Promote expansion of exports
- Build confidence among investors to stimulate private investment
- Support recovery of tourism and related services
- Maintain agriculture sector productivity and farming income
- Maintain economic expansion via government spending and investment
