Thailand's economy should not succumb to the global economic slowdown projected for next year, but rather continue its recovery propelled by new infrastructure development and increasing digital know-how among people, says Deputy Prime Minister Supattanapong Punmeechaow.
His 2023 economic outlook is in contrast to analysts, including the World Bank, which warned last month of the possibility of a global recession next year after central banks raised interest rates in response to high inflation.
Key transport infrastructure, digital literacy and companies supporting state efforts to reduce carbon dioxide will help drive the domestic economy, said Mr Supattanapong in a forum titled "Accelerating Thailand", held on Thursday by the Bangkok Post.
GROWING BUSINESS
Long-term infrastructure development, improved digital skills among Thais and campaigns for a low-carbon society will boost a range of businesses, from logistics to digital solutions and clean energy development, he said.
Many infrastructure projects, which started development in 2015, have been completed. New highways, deep-sea port facilities and wider networks of power transmission lines are set to go into operation in the next couple of years.
These projects aim to make Thailand a "regional business gate" to the world market, said Mr Supattanapong.
Thais have become more familiar with work, trade and financial transactions on online platforms after the outbreak of Covid-19 in early 2020, causing people to use more digital technology, he said.
More than 50 million people accessed online platforms and enhanced their digital skills over the past two years, said Mr Supattanapong.
"This reflects people are ready to work and complete financial transactions using digital infrastructure," he said.
In the energy sector, campaigns to reduce carbon dioxide emissions mean new opportunities for businesses in clean energy, including electric vehicles (EVs), energy storage systems and new equipment for smart energy management, said Mr Supattanapong.
The domestic EV market is expanding, with the number of newly registered battery-powered vehicles soaring by 250% year-on-year to around 13,000 in the first nine months of this year, he said.
The number of EV charging stations also increased to 869, with chargers tallying nearly 3,000 units, said Mr Supattanapong.
PTT Exploration and Production Plc is conducting a feasibility study on the construction of a carbon capture storage facility at its petroleum field, which is expected to store 7 billion tonnes of carbon dioxide, he said.
The shift towards clean energy also benefits the bio-economy, one of the pillars of bio-, circular and green economic development, already announced as a national agenda item by the Prayut Chan-o-cha administration.
The bio-economy is driven by the use of renewable resources as raw materials to produce energy, food and other value-added products.
"After the Apec summit in November, we are confident more investors will be drawn to Thailand because of these factors," said Mr Supattanapong.
WOOING INVESTORS
Speaking at the forum, Danucha Pichayanan, secretary-general of the National Economic and Social Development Council, said the country should accelerate foreign investment totals next year to ensure continued momentum of the economic expansion.
In addition to wooing more investment from large EV manufacturers, Thailand will have to lure those in the upstream electronic chip industry and other similar sectors to ensure supply chain security in the country, he said.
The country will also focus on using long-term resident visas to entice foreign companies to set up regional headquarters here, said Mr Danucha.
He said the Thai economy could expand at a higher level this year than many people expect.
Mr Danucha said while some global institutions such as the World Bank, the IMF and the Asian Development Bank have predicted possible slowing of the global economy next year, this could bring new opportunities for Thailand if national leaders can convince foreign businesses to relocate their production bases here as part of risk diversification strategies.
The Thai economy is on the recovery path, driven by domestic consumption, which has continued to expand since September, he said.
Private investment also continued to grow, even during the pandemic the past several months, said Mr Danucha.
ONGOING RECOVERY
The tourism industry is back in action as foreign visitors returned in droves following the country's full reopening, while other economic factors are improving and under control, he said.
Thailand expects 10 million foreign visitors this year, said Mr Danucha. The tourism sector is one of the country's main income earners, accounting for 17% of GDP.
He said in terms of economic stability, inflation is driven by cost pushes and peaked in the third quarter, with the rate likely declining going forward.
Inflation is expected to fall within the Bank of Thailand's target framework next year, said Mr Danucha.
Unemployment improved as the rate fell to 1.37% of the total workforce from a high of 2% during the pandemic. There is now a labour shortage, especially in the tourism sector, he said.
The Labour Ministry is cooperating to deal with the worker shortage, said Mr Danucha.
He said Thailand has strong economic fundamentals, with a debt-to-GDP ratio of 60%, well below the ceiling of 70%. Of total public debt, only 1.8% is foreign debt.
While Mr Danucha acknowledged there is a high spread between the Thai central bank's policy rate and those of some other countries, the country's net capital inflow is still positive, according to the Bank of Thailand.
Thailand's international reserves stand at US$220 billion, three times higher than the amount of short-term foreign debt.
He said the current account deficit is not a serious problem. Last year Thailand suffered a current account deficit as a result of few foreign arrivals during the pandemic, said Mr Danucha.
