New Finance Minister Pichai pledges to boost Thailand’s economy

Newly appointed Finance Minister Pichai Chunhavajira pledged to accelerate initiatives aimed at addressing household debt, stimulating the economy, and raising personal income.

Pichai, who previously held the chairman position at the Stock Exchange of Thailand and served as the prime minister’s advisor, observed a consistent decline in the country’s economic growth rate over the past two decades during his inaugural day at the Finance Ministry.

Pichai detailed how the economic expansion, which previously stood at a robust 4% to 5%, has dwindled progressively to 3%, 2%, or even 1% every five years, resulting in a reduction of one percentage point.

“A decline in a country’s GDP invariably leads to a decrease in people’s income. Despite low inflation, the rate of income growth lags behind inflation.”

Furthermore, he highlighted the issue of household debt, which has soared above 90% of GDP, rendering individuals incapable of borrowing, regardless of the interest rate. To tackle this issue promptly, Pichai suggests an economic injection. However, he emphasised that such a move should not be misconstrued as favouring wealthy business owners, given the interconnected nature of various economic sectors.

The finance minister further analysed the recent slide in Thailand’s economic growth, attributing it possibly to the country’s major reliance on goods production for export. He pointed out the likelihood of increased production costs and the necessity to adopt new technologies to replace Thai products dependent on outdated technologies.

To bolster the nation’s competitiveness, Pichai proposed two possible approaches: enhancing the competitiveness of existing products or fostering the development of new S-curve industries or domestic technology. He voiced the need to attract new technology producers to invest and establish production bases in the country.

Pichai expressed his belief that investors are looking for assurance from Thailand on its ability to produce clean energy, which is crucial for new technology production. Beyond enhancing competitiveness, the finance minister argued that Thailand needs to capitalise on its geographical advantage, strategically located between the Andaman Sea and the Gulf of Thailand, reported Bangkok Post.

While Thailand may not be able to compete with China in manufacturing, it could act as a middleman or land bridge for goods produced in China, thereby providing a new transportation option.