Thailand’s economy struggles to recover post-pandemic, with slow GDP growth. Government implements short-term cash payments and debt relief, along with long-term policies like free trade agreements and industrial changes.
Thailand’s Economic Slowdown
Thailand’s economy is struggling to recover from the impact of the COVID-19 pandemic, with slow growth in GDP and GDP per capita. Unlike other ASEAN countries, Thailand’s real GDP and GDP per capita have yet to surpass pre-pandemic levels. The country’s heavy reliance on tourism and large informal economy made it vulnerable to the repercussions of the pandemic. While there was some economic growth in the travel sector in 2023, the manufacturing industry continued to shrink, and merchandise exports decreased.
Government’s Economic Policies
The Thai government has implemented short and long-term economic policies to address the challenges faced by the economy. Short-term measures include providing one-time digital cash payments to around 50 million residents, debt relief initiatives, and cost-cutting measures in energy and electric train expenses. Long-term strategies involve the establishment of new free trade agreements, green industry projects, and a land bridge project. Despite these efforts, some Thai economists have expressed concerns over the fiscal implications and the rising public debt-to-GDP ratio.
Challenges in International Trade and Industrial Policies
Thailand’s new government is aiming to enhance international trade through free trade agreements, though there are doubts about their effectiveness in driving global value chains and increasing trade. Furthermore, the reconsideration of industrial policies focusing on domestic value added is crucial, as evidence suggests it may hinder development by participating in global value chains. Addressing supply-side constraints will be essential for Thailand to achieve its economic growth objectives and overcome obstacles in its recovery process.