Thailand’s economy needs structural changes for long-term growth, says report

EIC chief economist Somprawin Manprasert expressed his concerns as the SCB EIC forecast Thailand’s growth for 2024 at 3.0%, up from 2.6% this year.

The EIC report said the growth was being fuelled by export expansion, which was supported by rising global trade growth. Furthermore, private investment will increase in tandem with the recovery of exports, the increasing trend of investment promotion applications, and government policies to encourage investment.

Meanwhile, an increase in foreign tourists visiting Thailand will also help the country’s economic growth.

However, in the long run, Somprawin pointed out that the country needed growth engines, such as skilled labour, innovative sunrise industries, and strong domestic consumption.

“In the long-term, the SCB EIC is concerned that the Thai economy would grow at a slower rate than its potential to grow,” said Somprawin, adding this was due to long-term structural issues such as low investment, lower total factor productivity, and scars from the Covid pandemic.”

Thailand was among the countries with the slowest recovery from the Covid-19 crisis, he said.

Furthermore, the Thai economy remains fragile and weak as a result of uneven household and business recovery, particularly low-income households and small businesses with high debt but slow revenue recovery.

Besides, the country is facing rising uncertainties as a result of external factors such as climate change and geopolitical issues, as well as domestic factors such as government policies that must be closely monitored.