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Exports constitute 70 per cent of Thailand’s economy, yet the manufacturing sector is struggling to meet market demands, according to Pichai Chunhavajira, who was speaking at a business seminar. “We can’t compete. We can’t adapt in time,” he said read more
 "Why Thailand minister says economy nearly in crisis")
Thailand's caretaker Finance Minister Pichai Chunhavajira has expressed concerns regarding the economy. Reuters
Thailand’s economy is teetering on the brink of crisis, burdened by declining exports and an increasingly uncompetitive manufacturing sector, the nation’s caretaker finance minister warned on Wednesday (August 21).
Exports constitute 70 per cent of Thailand’s economy, yet the manufacturing sector is struggling to meet market demands, according to Pichai Chunhavajira, who was speaking at a business seminar.
“We can’t compete. We can’t adapt in time,” the capital markets veteran said without pulling any punches.
Pichai had assumed the role of Thailand’s finance minister in April following a cabinet reshuffle by former Prime Minister Srettha Thavisin.
Prior to his dismissal, Srettha, a political newcomer, had gone on a global tour to attract foreign direct investment, relaxed regulations to bolster tourism, and introduced measures aimed at alleviating debt for farmers and students in an effort to break a decade-long cycle of sub-5 per cent economic growth.
Thailand, the second-largest economy in Southeast Asia, posted a growth of 2.3 per cent in the April-June quarter compared to the previous year, up from 1.6 per cent growth in the first quarter. However, quarter-on-quarter growth slowed to 0.8 per cent in the second quarter from 1.2 per cent in the prior three months.
Economic forecasts
The finance ministry is forecasting economic growth of 2.7 per cent for 2024, following last year’s modest 1.9 per cent growth, which lagged behind regional peers.
The World Bank offers a slightly more pessimistic outlook, projecting growth to accelerate from 1.9 per cent in 2023 to 2.4 per cent in 2024. By 2025, growth is expected to reach 2.8 per cent, buoyed by both domestic and external demand.
According to the World Bank, the economy is anticipated to recover in 2024, driven by sustained private consumption alongside a rebound in tourism and goods exports.
Meanwhile, the central bank is widely expected to maintain its key interest rate at a decade-high 2.50 per cent for the fifth consecutive meeting later on Wednesday.
With inputs from Reuters
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