Thailand’s economy is on the verge of crisis due to falling exports and a lack of competitiveness in manufacturing, according to caretaker Finance Minister Pichai Chunhavajira, who spoke at a business seminar on Wednesday.
Exports represent 70% of the economy, yet the manufacturing sector has struggled to meet market demand, Mr. Pichai remarked. “We cannot compete. We are unable to adapt swiftly enough,” he stated.
Southeast Asia’s second-largest economy experienced a growth of 2.3% in the April-June quarter compared to the previous year, an improvement from the 1.6% growth in the prior quarter. However, quarter-on-quarter growth decelerated to 0.8% in the second quarter, down from 1.2% in the previous three months.
The Finance Ministry forecasts economic growth of 2.7% for 2024, following last year’s growth rate of 1.9%, which was below that of its regional counterparts.
The Bank of Thailand (BoT) is expected to maintain its key interest rate at a more than decade-high of 2.50% for the fifth consecutive meeting later on Wednesday. However, uncertainties surrounding the government’s 145-billion-baht handout might trigger renewed pressure for a rate cut.
