Thammasat University students interested in economics, ASEAN studies, Thailand, business, development studies, and related subjects may find it useful to participate in a free 2 September Zoom webinar on The Thai Economy One Year into the Srettha Administration.
The event, on Monday, 2 September 2024 at 9am Bangkok time, is presented by ISEAS – Yusof Ishak Institute, Singapore.
The TU Library collection includes many books about different aspects of the Thai economy.
Students are welcome to register for the event at this link:
https://us06web.zoom.us/webinar/register/4817225650359/WN_nYE88D7UQheBYqBjJE9zkQ#/registration
The event website explains:
About the Webinar
This webinar will address the state of the Thai economy under one year of Prime Minister Srettha Thavisin’s leadership. Key topics include the domestic economic landscape, which has shown signs of modest growth driven by tourism and private consumption, but faces structural challenges exacerbated by ongoing geopolitical shifts and domestic political uncertainty. The discussion will also cover Thailand’s long-term macroeconomic outlook and inequality issues, the effectiveness of the Thai government’s economic policies, and their broader international implications.
About the Speakers
Dr. Kirida Bhaopichitr is the Research Director of International Economics and Development Policy and Director of Economic Intelligence Service at the Thailand Development Research Institute (TDRI). […]
Dr Somchai Jitsuchon is the Research Director of Inclusive Development at TDRI and former member of the Monetary Policy Committee of the Bank of Thailand. He specializes in poverty and income distribution, inclusive growth, social protection and welfare systems, macroeconomic policies, and modeling.
Richard Yarrow is a Research Fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School and a visiting scholar at Thammasat University in Bangkok. His research focuses on economic development and policy in China and Southeast Asia.
The World Bank website offers a free report from July 2024 available for download, Thailand Economic Monitor July 2024: Unlocking the Growth Potential of Secondary Cities.
The report’s Key Findings follow:
The economy is projected to recover in 2024 supported by sustained private consumption as well as tourism and goods exports recovery. Growth is projected to accelerate from 1.9 percent in 2023 to 2.4 percent in 2024.
Growth is expected to reach 2.8 percent in 2025, supported by both domestic and external demand. This outlook is further bolstered by the revised fiscal budget proposal for fiscal year 2025 and the anticipated acceleration in budget execution following significant delays earlier this year.
Private consumption and tourism will be key drivers but their pace will slow. Goods exports are expected to rebound due to favorable global trade. Tourism is projected to return to pre-pandemic levels in mid-2025, set back by the Chinese economy.
Headline inflation is projected to slow to a regional low of 0.7 percent in 2024, below the central bank’s target range, due to the moderation in food and energy prices.
Public debt is projected to rise to 64.6 percent in fiscal year 2025. The fiscal deficit is projected to increase to 3.6 percent of GDP as budget execution normalizes and fiscal stimulus measures aimed at boosting consumption are implemented, in line with the government’s medium-term fiscal framework.
Thailand faces the mounting challenge of reconciling fiscal sustainability and short-term stimulus. To enhance fiscal resilience amid rising spending needs, Thailand can start by focusing on more targeted social assistance and transfers to effectively support vulnerable households and poverty alleviation. In addition, Thailand has room to raise tax revenue, promote equity, create fiscal space and accelerate investment.
A section of the report which focuses on “Unlocking the Growth Potential of Secondary Cities” highlights that in the long-term, secondary cities have the potential to further enhance Thailand’s productivity, spur its economic growth, and bolster its global competitiveness.
Thailand’s urbanization has been heavily focused on Bangkok, acting as a growth engine for the country. Bangkok as an urban agglomeration has a population 29 times larger than the next largest, Chiang Mai, and a GDP nearly 40 times greater than the next largest, Chon Buri. […]
Bangkok’s economy shows signs of stagnation, as its GDP growth has been roughly equal to its population growth. This suggests that the city’s economy is mature and potentially saturated, leading to little or no improvement in productivity.
Recently, per capita GDP growth in secondary cities has been nearly 15 times higher than in Bangkok. This faster growth in GDP per capita demonstrates the improved productivity, efficiency, and economic potential of Thailand’s secondary cities.
Secondary cities play a pivotal role in regional development serving as centers of local government and industry, satellite regions around Bangkok, or key economic trade corridors. Acting as hubs of regional economic activity, they help reduce the strain on Bangkok by providing alternative locations for businesses and industries. These cities play important roles—not only for creating jobs and economic diversification but also by promoting more balanced spatial development across the country.
A main challenge that keeps secondary cities from realizing their economic potential is its overly dependence on nationally raised revenues. If local governments have greater authority over urban planning, infrastructure development, and access to long-term financing mechanisms—complemented by robust fiscal instruments such as property taxes, income tax piggybacking, and user charges – these cities could effectively chart their own economic growth trajectories.
Also published in July 2024, an article in The Diplomat argued:
What’s Really Ailing Thailand’s Economy?
Domestic politics are part of it, but the real problem is that macroeconomic conditions are not favorable for Thailand’s export-heavy economy.
Last year, the Thai economy grew 1.9 percent, and analysts have trimmed their outlook for this year, with the World Bank now projecting GDP will grow by 2.4 percent. The first quarter of 2024 did little to assuage concerns, as growth came in at just 1.5 percent. Meanwhile, many of Thailand’s regional peers have seemingly bounced back after the pandemic and are achieving stable and relatively strong rates of growth. Indonesia’s GDP has been growing consistently at around 5 percent, while the Philippines’ grew 5.6 percent last year. This makes Thailand’s post-pandemic economic woes somewhat of an anomaly in Southeast Asia. Why is this the case?
Certainly, domestic politics are part of it. The current government is a patchwork coalition that came together in a very transactional way. The common interest that brought them together – preventing the Move Forward Party from gaining power – has proven to be a less than ideal foundation for governing. Policies are sometimes rolled out in a seemingly ad hoc fashion and then walked back, and the stability of the coalition is an ongoing question. This makes it hard, even under favorable macroeconomic conditions, to run a government effectively.
But the real issue for Thailand is that macroeconomic conditions are not favorable for a country with the kind of economy that Thailand has. There is a very important fact that we must establish at the outset, which is that Thailand’s economy is heavily structured around exports. The country exports more services than most of their neighbors, mainly in the form of tourism. And they also specialize in the export of manufactured goods. For instance, Thailand is the regional leader in auto and auto part exports and has been for years.
For this model of economic development to work, Thailand needs a stable and preferably under-valued currency, and it needs global demand for its goods and services to be high. It is no coincidence that when the Thai economy was growing at 4.2 percent in 2017, it was also running a surplus in its current account of $44 billion.
Right now, Thailand’s main problem is something that they have no control over and cannot fix, which is that global demand for Thai goods and services is weak. […]
(All images courtesy of Wikimedia Commons)