The Thai people will exercise their right to vote and select the leader and party that will rule the nation for the following four years in less than two months. In an effort to sway voters, all political parties have waged aggressive campaigns.
A special report
Because they directly affect people’s standard of life, economic policies are one of the first things that people consider when casting their vote.
The newly elected government will encounter problems and hurdles in preserving the country’s growth pace while also making people happy amid foreign uncertainties and volatility as well as an uneven recovery of Thailand’s economy, where tourism is rising but exports are decreasing.
The country’s economic situation would be difficult and complex after the election, according to Pipat Luengnaruemitchai, chief economist at Kiatnakin Phatra Securities, and Chao Kengchon, managing director at Kasikorn Thai Research Centre, Kasikornbank.
This year, according to Pipat, there will be a mixed recovery accompanied by unpredictably occurring external elements including geopolitical tensions, banking accountability, rising inflation, and a recession.
“In short, I believe the Thai economy will recover unevenly, and the primary risk will come from the outside world. It will be the worst-case scenario for the Thai economy if that climate has an impact on tourism numbers “he stated. “Although the external climate is quite unpredictable, the economy is still in deep trouble. Outclimbing a deep hole
He noted that the economy might not have fully recovered by the time the newly elected government takes office.
He portrayed the present situation as Thailand attempting to emerge from a large hole it has dug for itself. He cited inconsistent growth, despite the tourism industry being a major area of hope.
According to him, the unequal recovery will be devastating not only for the service and industrial industries but also for the wealthy and the less fortunate segments of society.
In the meanwhile, Chao predicted that the political process would make the economic climate extremely complicated following the election.
“It basically depends on how the election is approved subsequently. The choice of MPs and parliamentary approval are two distinct processes. The new government’s and the Cabinet’s establishment would provide another difficulty. Budget payout may be postponed if the certification procedure takes a lengthy period “He gave a justification.
He does, however, hold out some slender hope that the approval procedure and the establishment of the new administration would go without a hitch and be finished in good time, preventing any disruption, interruption, or delay of the payout.
Both Chao and Pipat concurred that both parties’ economic policies and programs had some key commonalities. Although the policies may have good intentions, they issued a warning that their true impact won’t be known until they are really implemented.
fiscally responsible measures
I believe the new administration must ensure that the electoral pledges they made are financially realistic and do not become unsustainable “Pipat stated.
Given Thailand’s three challenges—an aging population, high household debt, and sustainable growth—they believe the parties will each articulate stronger long-term strategies.
I believe the parties are making the proper plans, but the implementation and how they strike a balance between the short-, medium-, and long-term goals of their policies will be the main obstacles, according to Chao.
He desires that the recently elected government put more of an emphasis on structural and long-term problems.
demographic problem
He noted that Thailand was rapidly aging into a super-aged civilization. In a few years, the population of Thailand will peak, and then it will start to drop, just like it did in China and other nations. As a result, the labor market will become more competitive and labor costs will continue to rise.
This problem must be addressed by any government, he said.
Pipat endorsed Chao. He pointed out that the various fractures Thailand was currently experiencing would necessitate sound policies in order for the nation to maintain its growth.
He clarified that one of the indicators that Thailand was experiencing poor growth was the aging population.
Thailand will have a hard time accelerating its growth due to its lower working-age population.
a lot of debt per family
In addition to the country’s aging population, Pipat and Chao were concerned about the huge household debt, which would only get worse as the population continued to age.
“Thai seniors may not have enough funds to cover their expenses in the coming years due to the country’s rising life expectancy. The pressure to take care of them will be increased on their household and family as a result. Due to the extremely large household debt, this has already happened. I hope the incoming administration would focus on the structural issues “Chao said.
Due to the uneven character of the recovery, Pipat said that the new administration should concentrate its aid on disadvantaged groups since those who are particularly vulnerable would find it difficult to benefit from the economic recovery.
The incoming government, he continued, “needs to make sure that growth is inclusive.”
fight against climate change
Both economists agreed that the incoming administration must seriously address climate change while also following other sustainable development trends. They also agreed that Thailand needs to find a new economic engine beyond tourism and exports in order to be more competitive.
“We must take these challenges more seriously in the years to come. These problems will affect how we live in more noticeable ways. To make things more sustainable, we most likely need to pay more taxes. These are concerns that the future administration will have to think about, not this year or next, but ultimately “Chao uttered.
Pipat stated that the current predicament in Thailand calls for caution.
Many research organizations believe that the country can continue its moderate growth rate of 3.0-3.6% this year because of the robust recovery in the tourism industry and the influx of Chinese tourists.
The newly elected government will face increasingly challenging challenges, notably in the medium- and long-term, such as demographic trends, household debt, and sustainability.
The results of the general election on May 14 will determine the country’s future course as well as who will form the government and serve as prime minister.
