Experts warn of looming crisis for Thai economy

Dr Pipat Leungnamritchai, the chief economist at Kiatnakin Phatra Bank warned that the Thai economy is treading on thin ice, relying on unsustainable factors for growth. According to a recent exposé by Krungthep Thurakij on January 20, the nation’s financial stability is hanging by a thread.

Dr Pipat highlighted the precarious reliance on low-interest rates, fiscal stimuli, and the booming tourism industry.

“The Thai economy’s recent growth is akin to a house of cards.”

While these factors have fuelled the economy’s upward trajectory, they are merely short-term fixes, failing to foster the creation of quality jobs or sustainable growth.

Peeling back the layers, Dr Pipat identifies two obstacles standing in the way of Thailand’s economic growth. The first is a demographic hurdle, marked by a dwindling workforce and an increasingly aged population.

This grim reality poses a significant impediment to generating the robust economic growth Thailand desperately needs. The second adversary is a productivity challenge, with Thai businesses trailing behind their developed counterparts due to low education levels, minimal innovation, and a lack of competition.

In a parallel revelation, economist Dr Santitarn Sathirathai likens the Thai economy to an ageing athlete, struggling to keep pace in a race against regional competitors. In an article published by Krungthep Thurakij on January 22, Dr Santitarn echoes Dr Pipat’s concerns, underscoring the sluggish nature of Thailand’s economic growth compared to its neighbours, reported The Nation.

Dr Santitarn cited the shrinking workforce and a dearth of innovation as primary culprits behind the slowdown.

“The Thai economy is like an ageing marathon runner losing steam.”

As Thailand falls behind in the race for economic supremacy, urgent intervention is imperative to stave off an impending crisis.

Both economists stress the need for decisive government action, advocating for strategic investments in education, upskilling the workforce, fostering innovation, and cultivating a fiercely competitive business environment.