Renowned assistant governor of the Bank of Thailand, Chayawadee Chai-anant, has recently opened up about her concerns regarding the nation’s economic future. She believes that political instability forms a part of the triple-threat faced by Thailand’s economic stature. The other two causes for concern comprise global economic fortitude and the skyrocketing cost of living.
Chai-anant is worried that an extended hiatus in the establishment of the government could hamper the distribution of the budget intended for state agencies. She holds the opinion that the aftermath of this could be grave and severely detrimental to the economy. “The magnitude of resulting impact would be directly proportional to the length of the delay. If it’s too lengthy, it might dampen investor confidence,” she clarified.
Post the May elections, the Move Forward and Pheu Thai-led coalition, comprising eight parties, has yet to successfully constitute a government. The primary hindrance being the resistance from senators. Some coalition frontrunners have even proposed putting off the government’s inauguration for an additional 10 months, which aligns with the termination of the current Senate’s term.
On the subject of economic prognosis, Chai-anant revealed that there was a 5.9% decline in Thai exports in the month of June. However, she optimistically anticipates a revival in the situation before this year ends. She attributes this slump in exports to the decelerating global economic growth and the slowdown in China’s economic recovery.
On the brighter side, Chayawadee believes the economy seems to be on an upswing, fueled mainly by the steady resurgence in the tourism sector. In June alone, Thailand welcomed approximately 2.24 million tourists. Furthermore, the consistent upward trajectory in travel bookings and accommodation searches suggests a further increase in foreign tourist inflow in the coming months.
The unsteady political climate is also being held responsible for the downward trend of the baht against other regional currencies in June. Similar depreciation was noticed against the US dollar. Nevertheless, good news followed in July as the Thai currency made a comeback on the back of speculations of a policy rate increase by the US Federal Reserve.
Chayawadee shared that the country’s economic landscape saw a slight uplift in the second quarter compared to the first. She expects this upward momentum to persist in July, propelled further by developments in the tourism and service sectors.
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