Economic restructure proposed
Thai Prime Minister Anutin Charnvirakul received proposals from executives on May 15, focusing on short-term stimulus and long-term structural reforms to boost economic growth, but economists warn more targeted SME policies and infrastructure investment are needed to address vulnerabilities and rising costs. Analysts highlight concerns over household income, fragmented IT procurement, and competition from cheap imports, calling for clearer government frameworks to support domestic businesses and sustain recovery.
Thai Prime Minister Anutin Charnvirakul met with executives on May 15 to discuss economic proposals aimed at both immediate stimulus and long-term growth. Economists, including Amonthep Chawla of CIMB Thai Bank, praised the plans for covering short-term measures like a co-payment scheme to support domestic consumption amid sluggish demand, partly caused by the war in Iran. However, they emphasized the need for deeper structural reforms, particularly to improve small and medium-sized enterprises (SMEs), which face rising production costs, skill gaps, and competition from imported goods. The government’s 400-billion-baht emergency loan decree—split equally between short-term stimulus and investment—was described as reasonable, though analysts noted economic growth remains fragile. While the first quarter saw a 2.8% expansion driven by electronics exports, recovery has not been broad-based, with domestic consumption weakening due to higher energy prices and insufficient household income. Amonthep warned that living costs may further pressure consumption in the second half of the year despite government support. Supak Lailert, president of the Association of the Thai ICT Industry, urged the government to establish a clearer national IT framework and centralize procurement to reduce reliance on foreign technologies. He stressed the need for preferential treatment of domestic service providers to build long-term sustainability in Thailand’s tech sector. Independent economist Aat Pisanwanich highlighted the meeting’s focus on large corporations, which account for 70% of Thailand’s GDP, but called for direct engagement with SMEs, which make up 99% of businesses and contribute 30% to GDP. He pointed to high production costs—including raw materials, wages, fuel, and electricity—as key barriers, alongside skill gaps that make Thai products uncompetitive against imports, particularly from China. Analysts agreed that while the proposals address immediate challenges, targeted policies for SMEs and infrastructure upgrades are critical to ensure sustainable growth. Without intervention, liquidity constraints and structural issues could undermine Thailand’s economic recovery in the long term.
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