ASEAN KEY DESTINATIONS
January 6, 2008
Two urgent tasks facing Thailand's economy including restructuring the national economy to not rely too much on exports and to assist low-income earners even as the cost of living rises, must be tackled by the new government being formed following the December 23 general election, a senior Bank of Thailand (BoT) official said.
Songtum Pinto, head of BoT's Balance of Payments Division, said in his report that Thailand's economy grew considerably at around 5 per cent in 2007 due mainly to export expansion as a result of penetration of new markets.
The stability of the Thai economy would be impacted in the long-term if economic growth remains like this as domestic consumption would not recover while medium and locally-owned small-and-medium enterprises (SMEs) may face problem and, eventually, employment, said the report.
If Thai economy still remains overreliant on exports it may be affected by the current global economic volatility.
Investment in Thailand, which has already slowed during the past two years, could also be affected while it loses competitiveness to other countries, the report said.
Past oil price increases will definitely force the prices of several commodities to rise, and the new government must find ways to help low-income earners survive, it said.
However, Mr. Songtum said he disagreed with the populist programs to be implemented by the new government, including a plan to keep domestic gas and oil prices from rising, because it will only benefit the wealthy while consumption would also be inefficient.