Economy unlikely to grow in first quarter as Thai manufacturing crumbles

[webfact]

On Friday, Prime Minister Srettha Thavisin again called for the Bank of Thailand to lower its base interest rate. It came in the same week as he appeared to resurrect his short-term Digital Wallet policy. The government leader’s emphasis on populist economics conflicts with the message from the central bank. It warns that the only way for Thailand to resume substantial GDP growth is to address the country’s multitude of structural problems. At length, this also now includes an increasingly obsolete manufacturing base.

The Thai economy is at a crossroads, Prime Minister Srettha Thavisin continues to clash with the Central Bank as the country’s industrial base erodes. A resurgent foreign tourism sector is now supporting the economy. Future GDP growth in substantial terms requires hard decisions and long-term initiatives.

The Thai economy is not expected to grow in the first quarter of 2024. At the same time, its manufacturing base continues to decline. This week saw more evidence of tension between Bank of Thailand Governor Sethaput Suthiwartnarueput and Prime Minister Srettha Thavisin. It comes as the latter resurrects his already controversial and short-term Digital Wallet plan. Despite this, the country’s foreign tourism sector continues to advance. It was a major contributor to a $2 billion current account surplus revealed on Friday.

On Friday, Prime Minister Srettha Thavisin again called for the Bank of Thailand to lower its base interest rate. It came in the same week as he appeared to resurrect his short-term Digital Wallet policy. The government leader’s emphasis on populist economics conflicts with the message from the central bank. It warns that the only way for Thailand to resume substantial GDP growth is to address the country’s multitude of structural problems. At length, this also now includes an increasingly obsolete manufacturing base.

However, Thailand is now at a tipping point as its industrial base becomes eroded. This is happening due to technical challenges and intense competition from regional peers.

 

Securing the country’s economic future urgently requires the government to confront chronic long-term problems. It needs the right answers and it needs them fast. Anything less than this will see Thailand become a tourist haven with an enlarged casual economy and permanently stunted growth prospects.

 

by Joseph O' Connor

 

Full story: Thai Examiner.com 2024-04-01

 

- Discover how Cigna Insurance can protect you with a range of visa-compliant plans that meet the minimum requirement of medical treatment. For more information on expat health insurance click here.

 

Get our Daily Newsletter - Click HERE to subscribe
 

 

[nausea]

46 minutes ago, webfact said:

will see Thailand become a tourist haven with an enlarged casual economy

Yeah, I'd go with that. 

[daveAustin]

The smiling donkey is on almost every article now. Does anyone know if there’s an extension to block certain images? I would be happier looking at the arse end of a buffalo. Oh wait! 😋

[stoner]

these fools never cease to amaze. this place is doomed and will never vault into the new world. 

[mfd101]

6 hours ago, webfact said:

from the central bank. It warns that the only way for Thailand to resume substantial GDP growth is to address the country’s multitude of structural problems. At length, this also now includes an increasingly obsolete manufacturing base.

Looking forward to the next 50 years of economic & social revolution in LOS, led by the country's forward-looking politicians and it's well-educated, tech-savvy and enterprising capitalist class.

[hotchilli]

6 hours ago, webfact said:

The Thai economy is at a crossroads, Prime Minister Srettha Thavisin continues to clash with the Central Bank as the country’s industrial base erodes. A resurgent foreign tourism sector is now supporting the economy. Future GDP growth in substantial terms requires hard decisions and long-term initiatives.

The middle class has been largely destroyed, hence no-one buying anything much, small and medium manufacturers are going to the wall...

[Srikcir]

8 hours ago, webfact said:

The government leader’s emphasis on populist economics conflicts with the message from the central bank.

In "Asean now" in this same edition PM Srettha "made it clear that Thailand will stamp out the current freewheeling liberal atmosphere regarding to sale and consumption of cannabis" (my italics)

So his emphasis on populist economics apparently has limits if not irrationality and lacking populism, all of which actually further damage the Thai economy.

8 hours ago, webfact said:

A resurgent foreign tourism sector is now supporting the economy

No, it's not supporting the economy but adding  to the economy, albeit insufficiently according to the Bank of Thailand to make a difference to GDP growth. It is largely export of Services / Products and Manufacturing that support Thailand's economy. Throw in 10 years out of accekersting control household debt and greater income inequality, the Bank of Thailand's steadfast economic conservatism will become a life preserver versus a fire engine.

 

 

[dinsdale]

Poor education base and no industrial sector. A recipe for disaster.

[spidermike007]

10 years of army control, and 9 years of the Prayuth Decimation did not help at all. Shutting the country down for way too long due to covid was another factor. The destruction of democracy is likely an additional factor.

 

There's a lack of consumer confidence around the world, Thailand is not making any of the sacrifices required to attract higher end tourism, and the current policies are downright regressive. This nation stands no chance with this current administration and this do nothing PM. 

[MrPancake]

Middle income trap.

They won't escape it.

Population is too old for that.

 

 

 

 

 

[metisdead]

A post with a trolling meme contravening our Community Standards has been removed.