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Thailand’s Welfare Crisis: 1 Trillion Baht Time Bomb Set to Explode by 2033!

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Growing Social-Welfare Expenditures in Thailand Pose Economic Challenges

Thailand’s rising social-welfare costs are expected to surpass 1 trillion baht in 2033 due to an ageing population and the increasing cost of elderly care. As the number of senior citizens in Thailand rises, the government’s spending must also grow to accommodate their needs. At the same time, tax revenues from the working-age population are under strain.

Falling Birth Rates Concern Finance Ministry

The country’s Finance Ministry, represented by deputy spokesperson Pornchai Thiraveja, highlights the falling birth rates in Thailand since 2013. This demographic shift can lead to a deceleration in the country’s economic growth, thereby affecting the state’s tax revenues. Moreover, the cost of providing services to the growing elderly population has increased by 5.15% over the past five years, according to Pornchai.

Striking a Balance Between Spending and Tax Revenue

As the cost of elderly care rises, the Thai government needs to find a way to address the imbalance between expenditure and tax revenue. Pornchai reveals that social-welfare project costs have increased from 509 billion baht in 2018 to 706 billion baht in 2023. This worrying trend is set to continue due to Thailand’s quickly ageing population, causing projected social-welfare spending to reach 1 trillion baht by 2033.

Pornchai’s Suggestions for Alleviating Budgetary Pressure

To mitigate the economic strain caused by increased social-welfare costs, Pornchai suggests several measures that the government can implement. These include:

  • Encouraging workers to save more for retirement, reducing state costs and allowing better management of social-welfare resources for those in greater need.
  • Promoting health insurance and self-care among citizens, and ensuring adequate senior medical facilities to boost the number of employable individuals.
  • Urging job-seeking behavior for healthy senior citizens in their 60s, while offering incentives like income-tax deductions to employers that hire them.

Establishing a Government Unit to Address Ageing Population

Pornchai further recommends that the Thai government establish a dedicated unit to study and report on the ageing society and its economic impacts. He notes that other countries with ageing populations, such as European nations and the United States, already have government bodies that research the issue of an ageing society and provide advice on how to combat its negative effects.

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