In March next year, Thailand will have to elect a new prime minister to help the country revive its fading economy. Thailand’s Prayuth Chan-ocha wants another term to make his projects proceed faster.
Prayuth Chan-ocha Seeks Another Term
Like any other economy in the world, Thailand has suffered a beating from the effect of the pandemic since 2019. Current Thai PM, Prayuth Chan-ocha expresses his intention of having a second term. He denies rumours of being replaced because of the country’s distressed economy.
Prayuth broadcasted on the government’s website, promising to restore the economy. He stipulated establishing infrastructure and endorsed the electric vehicle industry. Moreover, he guaranteed that his scheme would begin showing results in two years. He appealed to the public for their support to help him accomplish his long-term projects.
Since May 2014, Prayuth has ruled Thailand as he withdrew a military coup during that time. He stayed as military chief until elections were organized in March 2019. Under a quasi-civilian administration, he officially assumed the prime ministership.
During the formation of the coalition ruling in the July 2019 policy speech, he swore to pull the country out of its middle-income disadvantage. This is one of the setbacks that many countries need to deal with, especially when the pandemic took its toll worldwide.
Thailand Slower Economic Recovery
Last year, the country’s economy increased by 1.5%, however, it’s the lousiest performance among major SEA nations. Thailand is anticipated to struggle along at a reasonably low 3% more or less this year.
Prayuth cannot do more about the largest heave on Thailand’s economy, such as tourism, which accounts for 10% of the nation’s gross domestic product (GDP). Even if the country now allows international arrivals, a big bounce in tourism isn’t possible at this time. Covid-19 remains a threat including its repercussions, as well as the energy cost because of Russia’s Ukraine invasion.
However, Thailand’s economic recovery is sluggisher compared to its neighbouring ASEAN countries. Besides, it deals with other problems.
“The population has peaked out, and foreign companies’ investment appetite has diminished,” said visiting professor Seiya Sukegawa.
Most Thai households need to borrow money to make both ends meet. Based on the Bank for International Settlements (BIS) data, last year’s household debt reached 91% of GDP. It’s up by 10.8% from 2019 before the pandemic. It became much worse than the developing economy average of 51%.
Thai’s June Trade Deficit Increases While Baht Weakens
Thai’s June trade deficit was more than 40 million baht. This is relatively due to the 19% increase in import values, particularly energy. Additionally, the currency weakened against the US dollar, according to Krungthai Global Markets Strategist Poon Panichpibool.
Poon said that the baht is anticipated to range between 36.3 and 36.9 baht/US dollar this week. He also predicted that the baht currency may weaken more, but won’t break the 37 baht/US dollar threshold. That is when China doesn’t adopt widespread lockdowns to curb the spread of Covid-19 in the country.
He added that the drop in the baht’s international value will be slowed down by the foreign investors and some traders’ short-term profit taking in hope of the better than anticipated recovery in the tourism business. He highly suggested that businesses utilize some tools to minimize their risks from foreign currency unpredictabilities to improve efficiency.
Image Source: Government of Thailand/WikimediaCommons (Creative Commons Attribution 2.0 Generic)
