Thailand’s Aging Population Challenges Economic Growth

[webfact]

 

Thailand is experiencing a significant demographic shift. An aging population and declining birth rates are starting to have a noticeable impact on the country's domestic consumption, a crucial driver of economic growth. According to a recent report by the Kasikorn Research Centre (KRC), this transition is introducing several economic challenges.

 

Currently, domestic consumption contributes 58% to Thailand’s economic growth, up from 53% a decade ago. However, this trend contrasts with many neighbouring countries that rely less on internal consumption for growth. In Singapore, for instance, the reliance on domestic consumption has decreased from 37% to 31% as it transitions into a “super-aged” society. Similar patterns are being noticed in Indonesia and Vietnam.

 

Several factors are contributing to the declining consumption rate in Thailand. A sluggish economy, high living costs, and increasing household debt are all playing a part. Moreover, the birth rate continues to decline, which, if uncorrected, will further reduce domestic consumption levels.

 

 

The report highlights that around 34% of elderly Thais have monthly incomes below the poverty line, with a significant portion still engaged in the low-income farming sector. These elderly individuals, averaging a monthly income of just 6,975 baht, possess limited purchasing power which in turn affects overall economic consumption.

 

KRC underscores the urgent need for the Thai government to adjust its economic strategies. To combat the contracting consumption, policies aimed at increasing incomes and improving quality of life are essential. The report suggests that support for Small and Medium-sized Enterprises (SMEs) is crucial, as these businesses represent 99.5% of all enterprises in Thailand and employ 71% of the workforce, yet contribute only 35% to the GDP.

 

Additionally, the public sector should offer incentives to hire older adults and attract foreigners with high purchasing power or skills to Thailand. Such measures could play a significant role in addressing the economic challenges posed by the aging population.

 

Picture courtesy: India Times

 

-- 2024-05-24

 

Get our Daily Newsletter - Click HERE to subscribe

[Gsxrnz]

Thailand should follow the Western example and open the borders to all and sundry.  Nothing could possibly go wrong.

[motdaeng]

"Kids Are Too Expensive!” How Thailand Became One Of The World's Fastest Aging Countries

 

 

[ikke1959]

It is not the aging that is pretended here, but the many lives lost in traffic accidents that makes it seems that aging is the problem. Many young people die or are disabled and therefor can't contribute to the economy. Result less births, more poverty as many times the person who brings in the money is involved, and more debts.. A problem that the Government has to solve by good education, driver schools, and decent wages..But as long as the idea is keep the people poor and divide to get richer every year, the problems will get bigger

[spidermike007]

I really never understood the concept of economic growth, and why it's so important. So what if an economy shrinks? So what if you don't have economic growth?

 

And this is partly due to incredibly smart and incredibly sensible people deciding not to have children at this stage in the planets evolution. Or having only one child. I completely agree with them, I've made that the same great decision myself. It's all good. It's great that society is at a point where we can make that choice

 

If you have a lower population you don't need as much economic growth, it takes the strain off of so many elements of society and on so many levels shrinking population is a great thing for the planet. So I say may the shrinking continue and may the contraction continue. Sure some jobs will be lost but the overall benefits will be huge. 

[mfd101]

6 minutes ago, spidermike007 said:

I really never understood the concept of economic growth, and why it's so important. So what if an economy shrinks? So what if you don't have economic growth?

 

And this is partly due to incredibly smart and incredibly sensible people deciding not to have children at this stage in the planets evolution. Or having only one child. I completely agree with them, I've made that the same great decision myself. It's all good. It's great that society is at a point where we can make that choice

 

If you have a lower population you don't need as much economic growth, it takes the strain off of so many elements of society and on so many levels shrinking population is a great thing for the planet. So I say may the shrinking continue and may the contraction continue. Sure some jobs will be lost but the overall benefits will be huge. 

Yes, the obsession with 'economic growth' continues worldwide, despite the apparent concern about environmental devastation and despite the well-known fact that the whole world is entering a century or more of population decline which makes ever-larger economic goals both stupid and unachievable.

[hotchilli]

A few decades ago most Thai families knocked out half a dozen kids, expecting to lose a couple along the way.

Education was affordable up to a certain age then out to work.

Times have changed, kids cost money, people are struggling on low incomes.

The wealth gap has changed dramatically, politics have not.

[spidermike007]

43 minutes ago, mfd101 said:

Yes, the obsession with 'economic growth' continues worldwide, despite the apparent concern about environmental devastation and despite the well-known fact that the whole world is entering a century or more of population decline which makes ever-larger economic goals both stupid and unachievable.

I sure hope I am still around as the population declines. 

 

Unfortunately, there are still 20 counties in Africa, which are desperately defying the trend. All of them Muslim. 

[Snackbar]

71% produce 35%
 

Interesting

[nobodysfriend]

Obsessed with economic growth , they do not realize that eterrnal economic growth is neither sustainable , nor achievable .

King Bhumiphol ( may he RIP ) had it right with his sustainable economy theory .

Pity that it died together with him ... they should have listened and acted consequently , but , as usual , greed overtook morality  ...

[mfd101]

1 hour ago, spidermike007 said:

Unfortunately, there are still 20 counties in Africa, which are desperately defying the trend. All of them Muslim. 

But coming down, I think, the black African countries and the Muslim countries. Still some way to go till they're below reproduction rate (which for poor countries in Africa is 2.3, not 2.2 as in rich countries).

 

The important point is that the turn downwards has already taken place and can only strengthen from now on. As the Chinese have discovered, once the turn is made, it's almost impossible to reverse it.

 

Which doesn't mean that the total world population won't reach 9 billion in the meantime ... before it too starts downward late in the century.

[soalbundy]

3 hours ago, spidermike007 said:

I really never understood the concept of economic growth, and why it's so important. So what if an economy shrinks? So what if you don't have economic growth?

 

And this is partly due to incredibly smart and incredibly sensible people deciding not to have children at this stage in the planets evolution. Or having only one child. I completely agree with them, I've made that the same great decision myself. It's all good. It's great that society is at a point where we can make that choice

 

If you have a lower population you don't need as much economic growth, it takes the strain off of so many elements of society and on so many levels shrinking population is a great thing for the planet. So I say may the shrinking continue and may the contraction continue. Sure some jobs will be lost but the overall benefits will be huge. 

Normally you need economic growth to pay off the country's foreign debt. As the now deceased Bavarian minister president Strauss once said, "growth is not everything but without growth there is nothing".

Children are the next generation to pay the pensions of the old, they will be the future service providers, fire brigade, police, doctors, nurses etc. Fewer people doesn't mean you need fewer services, fewer plumbers, fewer electricians, fewer road workers but it does mean there are less taxes to pay for all this. Less consumption means lower production numbers which in turn will cause prices to rise. An infrastructure made for 80 million people will fall apart if the numbers drop to 40 million. Old vulnerable people who have no children to help them will need more support from the state but where are the nurses and money to come from.....Sub-Saharan people, they are the only ones with a population growth.....I can just imagine the nashing of gums from the oldies then.

 

 

[khunPer]

10 hours ago, webfact said:

Currently, domestic consumption contributes 58% to Thailand’s economic growth, up from 53% a decade ago. However, this trend contrasts with many neighbouring countries that rely less on internal consumption for growth. In Singapore, for instance, the reliance on domestic consumption has decreased from 37% to 31% as it transitions into a “super-aged” society. Similar patterns are being noticed in Indonesia and Vietnam.

With a relative low education – i.e., need of better schools – and political promises to double the minimum wage, are poison to foreign investments in production, where skill lacks for higher levels, and unskilled labour cost might double or more before the investment is earned back. That's probably why increase in tourism seems to be the financial way out for a government that promise wage-increase (much) faster than general inflation.

 

Children has changed from traditionally being beneficial – i.e., working force and thereby income for a family – to being a financial burden, so fewer children sre wished for per family, or only less children can be afforded. It's general facts for most countries, where there is a relative financial grow in the population that the fertality decreases to less than two children per woman, and the population thereby ages too fast, also helped by longevity among the aging part of the population.

[spidermike007]

1 hour ago, soalbundy said:

Normally you need economic growth to pay off the country's foreign debt. As the now deceased Bavarian minister president Strauss once said, "growth is not everything but without growth there is nothing".

Children are the next generation to pay the pensions of the old, they will be the future service providers, fire brigade, police, doctors, nurses etc. Fewer people doesn't mean you need fewer services, fewer plumbers, fewer electricians, fewer road workers but it does mean there are less taxes to pay for all this. Less consumption means lower production numbers which in turn will cause prices to rise. An infrastructure made for 80 million people will fall apart if the numbers drop to 40 million. Old vulnerable people who have no children to help them will need more support from the state but where are the nurses and money to come from.....Sub-Saharan people, they are the only ones with a population growth.....I can just imagine the nashing of gums from the oldies then.

 

 

Well I certainly understand the conventional wisdom, and certainly a lack of growth will induce a certain amount of pain on the part of the population. But big picture there are some enormous benefits for the planet. And humanity. I do not believe that the population growth that the planet is seen over the past hundred years can be sustained. The quality of life is dropping for most. 

[spidermike007]

1 hour ago, mfd101 said:

But coming down, I think, the black African countries and the Muslim countries. Still some way to go till they're below reproduction rate (which for poor countries in Africa is 2.3, not 2.2 as in rich countries).

 

The important point is that the turn downwards has already taken place and can only strengthen from now on. As the Chinese have discovered, once the turn is made, it's almost impossible to reverse it.

 

Which doesn't mean that the total world population won't reach 9 billion in the meantime ... before it too starts downward late in the century.

Some are predicting China's population to drop to 650 million by 2050, and I've seen some predictions that Thailand's population could drop to 35 million by 2060. 

[mfd101]

3 minutes ago, spidermike007 said:

Some are predicting China's population to drop to 650 million by 2050, and I've seen some predictions that Thailand's population could drop to 35 million by 2060. 

Long live the day! 😀

[BangkokReady]

 

10 hours ago, motdaeng said:

"Kids Are Too Expensive!” How Thailand Became One Of The World's Fastest Aging Countries

 

 

 

An interesting video.  It seems that, with the younger people they spoke to at least, there seems to be a sense of them wanting to be able to spend their money on themselves.

 

The people who said they couldn't afford to have children seemed to have a fair amount of money, but wanted to spend that money on nice things (and cats).

 

It also might be a factor that they plan to have enough money to support their own retirement, and don't see the need for children to take care of them.

 

I wonder if there is some Western influence at play with the whole "prolonged childhood" thing...

[BangkokReady]

5 hours ago, spidermike007 said:

I really never understood the concept of economic growth, and why it's so important. So what if an economy shrinks? So what if you don't have economic growth?

 

https://www.bankofengland.co.uk/explainers/why-does-economic-growth-matter

[Geir Rasch]

6 hours ago, spidermike007 said:

I really never understood the concept of economic growth, and why it's so important. So what if an economy shrinks? So what if you don't have economic growth?

 

And this is partly due to incredibly smart and incredibly sensible people deciding not to have children at this stage in the planets evolution. Or having only one child. I completely agree with them, I've made that the same great decision myself. It's all good. It's great that society is at a point where we can make that choice

 

If you have a lower population you don't need as much economic growth, it takes the strain off of so many elements of society and on so many levels shrinking population is a great thing for the planet. So I say may the shrinking continue and may the contraction continue. Sure some jobs will be lost but the overall benefits will be huge. 

The problem is not that the population scrinks, but that the aging part of the population grows. Then a bigger part of the population must be taken care of by the scrinking part of the population. To achieve that you need economic growth.

[spidermike007]

I know a couple who are quite wealthy, and they decided not to have children, instead they've amassed a world-class wine collection with a 4,000 bottle celler in their basement. They have a gorgeous home, they have great independence, and travel all over the world constantly pursuing their passion of diving with sharks at very exotic locations, they eat in the best restaurants and they basically said that all that was a reasonable trade-off for not having children.

 

I totally agree. It is a far higher quality of life without kids, for some of us. Many are questioning bringing kids into the world, at this point in time. I get it and I love it.