Ekniti Warns Thailand's Economy Is Stuck in Chronic Low Growth, Saying Even 3% Is Now Hard to Achieve, Urges Investment in People and AI to Build New Growth Engines
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Dr. Ekniti Nitithanprapas, Deputy Prime Minister and Minister of Finance, said Thailand's economy is facing four key risks. The first is persistently low growth: from average expansion of about 7% before the 1997 crisis, growth fell to about 4% and then slowed to roughly 3%, and today even 3% is hard to achieve. This reflects structural problems caused by Thailand's long-standing failure to invest adequately, compounded by an ageing population structure in which people over 60 make up about 20%, or one in five, of the total population. The second is economic stability, which differs from the 1997 crisis because Thailand now holds more than 280 billion US dollars in foreign reserves, and including forward positions about 300 billion dollars, enough to cover roughly 10 months of imports, while reserves are about 2.5 times short-term external debt. The point to watch is therefore the fiscal position after the government deployed large-scale fiscal measures during the COVID-19 crisis. The third is income distribution: Thailand's economy is worth nearly 20 trillion baht, but the top 20% income group accounts for about 50% of national income, while the bottom 20% has a share of less than 5%. The fourth is the environment and climate change, as Thailand still relies heavily on imported oil and natural gas. Dr. Ekniti said the solution must involve repairing, strengthening and building anew, and must seize the moment when foreign companies want to diversify their production bases and supply chains to draw new industries into the country. The private sector has proposed seven target industries as the spearhead: smart agriculture and processed food, smart electronics, future vehicles and electric vehicles, health and wellness, quality tourism, trade and logistics, and the creative economy and e-commerce. The government, meanwhile, will act as the midfield, supporting investment, foreign affairs, SME development and human capital development.