Thailand’s potential growth rate will be the lowest among ASEAN (Association of Southeast Asian Nations) countries over the next 20 years, the World Bank (WB) predicted.
According to the Bangkok Post on the 17th, the World Bank diagnosed Thailand’s potential growth rate of around 3% over the next 20 years without economic reform in a Thai economic report released on the 14th.
Kiatipong Sariyaprucha, chief economist at the World Bank for Thailand, cited aging, slowing private investment, and falling labor productivity as the reasons for the decline in the growth rate.
The World Bank forecasts Thailand’s GDP growth rate of 3.2 percent and 3.1 percent in next year and 2025, respectively. This is also the lowest in the ASEAN region.
This year’s growth rate is projected to be 2.5 percent. The economic recovery has slowed down, with the growth rate compared to the same period last year reaching 1.5 percent in the third quarter, far below expectations.
Thailand, which is highly dependent on the tourism sector, has been severely hit by the COVID-19 outbreak.
It is analyzed that the recovery of the manufacturing industry is also slow due to the global economic slowdown.
Investment attraction performance was also less than that of neighboring countries.
Foreign direct investment (FDI) in Indonesia, the Philippines, Malaysia, and Vietnam increased in 2020, but FDI to Thailand decreased.
FDI in Thailand improved between 2021 and 2022, but fell behind Malaysia and Vietnam.
To improve its long-term growth potential, Thailand should invest more in human capital, education, health, response to climate change, and tax reform to make structural reforms through fiscal policy, the World Bank advised.
The Thai government is making economic revitalization a top priority.
To restore the tourism industry, visa-free entry to Chinese, Russian, and Indian tourists was allowed, and the business hours of entertainment establishments were extended to 4 a.m.
The Thai government, which aims to make strengthening soft power one of the pillars of economic development, is also pursuing plans to focus on fostering 11 fields, including tourism, festivals, sports, and food.
The government tried to pay 10,000 baht (about 370,000 won) to all citizens over the age of 16 to boost the economy, but has put it on hold due to opposition from concerns over the national financial burden.
In his first parliamentary address since taking office in September, Prime Minister Seta Tawisin said, “The Thai economy is like a sick man after the COVID-19 crisis,” and said he would urgently implement measures to revitalize the economy.
SALLY LEE
ASIA JOURNAL
