Three months into power, Prime Minister Srettha Thavisin needs to step up to turn Thailand’s COVID pandemic-hit economy around. Even though the country’s economic growth rebounded in the first quarter of 2023 by 4.5 percent, it’s still trailing behind.
Sethaput Suthiwartnarueput, Thailand’s central bank chief, said the country is below the 3.1% expansion forecast by economists. “The picture is not all wine and roses. There are some soft spots. Exports have come in weaker than expected due, in significant part, to China’s slowdown. Total spending from tourism has also come in a bit softer due to fewer Chinese tourists than expected.”
Thailand’s economy is largely dependent on tourism. This sector has managed a robust recovery, but arrivals and tourism spending is still below pre-pandemic levels. China is Thailand’s largest trading partner. As such, the economic slowdown in China has impacted Thailand as well.
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Analysts say the newly elected government should help calm the market. Kobsidthi Silpachai, head of capital markets research of Kasikornbank, said Thailand’s main stock index rose by 0.2 percent on Wednesday, but the baht eased 0.2 percent against the dollar. “We can expect to see a short-term sugar high. After the dust settles, new risk factors will be in the spotlight, such as the formation of a cabinet. The private sector and investors will then decide their vote of approval.”
The PM, in his first address since winning office on Wednesday, promised to provide solutions to fix Thailand’s economy, among other measures, and manage the budget transparently. He said Thailand is at an important juncture. “I am confident that the next four years will be four years of change.”
As part of the election campaign, Srettha and his populist Pheu Thai party had pledged to grow the economy by five percent every year, and raise daily minimum wages and triple farmers income. They also promised to reduce urban rail fares, energy, electricity and gas costs, besides providing one-year debt moratorium for smaller businesses hit by COVID-19.
