The economic landscape of Thailand is currently under intense scrutiny, with potential recession worries echoing throughout the country. Reasons include the country’s lackluster export projections and a staggered recovery pace from COVID-19 aftermaths. The government’s economic revival strategies, as outlined in a 43-page statement, have been lambasted by opposition parties and industrial titans, citing an insufficient level of details in the proposed plans.
These observers have also questioned the financial sources for implementing initiatives, such as the 10,000-baht digital wallet scheme, which is speculated to require a hefty budget of around 560 billion baht. Despite the brewing skepticism, Somjai Phagaphasvivat, an independent political and economic analyst, sees no valid hints of recession in Thailand’s economic future.
“Recession could occur only under the spell of an economic crisis, like a sudden surge in energy prices. The current scenario is far from it,” observes Somjai. He was also appreciative of the government’s financial rejuvenation measures such as the digital currency handout plan. The scheme is expected to inflate the GDP growth by an additional 1% in the upcoming year.
However, the country’s main economic growth regulator, the National Economic and Social Development Council, has rolled back its growth predictions for 2023 to 2.5-3% amidst the worldwide economic slowdown. Yet, the tourism sector emerges as the silver lining for Thailand’s economic resurgence. It forms 23% of the national GDP and is expected to boost the economic growth further with the projection of foreign visitor arrivals peaking at 28-29 million this year. This figure is touted to escalate to 30 million next year, almost reaching the 40 million mark, a record set in 2019, by 2025.
But the tourism industry is currently riddled with doubts regarding potential minimum wage increments as this measure’s details are still nebulous. The government has pinned a new target to ramp up foreign tourism earnings to a whopping 3 trillion baht, marking a significant leap from 1.9 trillion baht recorded in 2019.
Chairman of the Thai National Shippers’ Council, Chaichan Chareonsuk, strongly denies any impending recession and describes the contemporary Thai economy as experiencing a technical recession or a temporary slowdown relegated to just this year. He argues, “There’s a noticeable slowness, a phase of minimum growth, but it is far from being a recession.”
Tanit Sorat, vice-chairman of the Employers’ Confederation of Thai Trade and Industry (EconThai), also echoed the same sentiment. He acknowledged that the Thai economy would bear the brunt of a decelerated economy in other countries, including the US and Europe. However, the vice-chairman exudes an air of optimism when discussing Thailand’s economy. “‘With a speculated GDP growth of over 2% this year, I see no reason for panic,’ proudly states Sorat.”
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