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Thailand’s 30th Prime Minister in charge: Challenges and Hopes for Business Sector
Thailand’s Parliament has elected Srettha Thavisin as the country’s 30th prime minister, bringing relief and optimism to the business sector.
Key Takeaways
- The election of Thailand’s 30th prime minister has brought relief and optimism to the business sector, with hopes for quick action on economic issues.
- Thailand’s new prime minister-elect, Srettha Thavisin, aims to stimulate the economy through policies such as transferring money into digital wallets and increasing the minimum daily wage.
- The new government’s policies, such as a 560-billion-baht scheme to boost spending power, may contradict the Bank of Thailand’s preference for maintaining economic stability.
- To address slowing growth, the newly appointed prime minister aims to promote tourism and focus on four key areas: technology advancement, industry supply chain development, Thai firms investing abroad, and infrastructure improvement.
Business leaders are urging the new government to address economic issues such as the high cost of living, tourism promotion, government spending, and fiscal planning. However, concerns have been raised about the government’s policies conflicting with the Bank of Thailand’s monetary policy. Thailand’s economic growth has slowed, with domestic consumption and tourism being the main drivers.
The new prime minister, Srettha, has expressed a commitment to promoting tourism. Despite the challenges, there is cautious optimism about the economic outlook under Srettha’s leadership.
The capital market is looking for policy support in areas such as technology advancement, industry supply chain development, foreign investment, and infrastructure improvement. Simplification of rules and regulations is also desired.
Srettha’s key policies include transferring 10,000 baht into the digital wallets of people over 16 to stimulate private spending and raising the minimum daily wage. The challenges for the new government include economic recovery, maintaining coalition stability, and the impact on international relations.
Eastern Economic Corridor (EEC) challenge
The new government of Thailand will face challenges in accelerating the development of the Eastern Economic Corridor (EEC), a flagship project aimed at promoting sustainable economic growth. While progress has been made in worker training and the development of precision medicine, infrastructure projects such as a high-speed railway and port expansion have faced delays. Investment in new industries has been minimal, with the majority of investments going to existing industries.
Falling exports challenge
Thailand’s exports for the first seven months of the year have dropped by 5.5% compared to the previous year, resulting in a trade deficit of $8.2 billion. The decline in exports in July was attributed to interest rate hikes and credit tightening, as well as the slow economic recovery in China. However, there are positive signs for Thai industrial products, with increased orders for cars, automotive accessories, and machinery. Exports of farm and agro-industrial products have fallen for three consecutive months due to economic slowdowns in trading partners like China, Japan, ASEAN, and Europe.
Tourism and visa challenge
The new Thai government is considering extending tourist visa validities from 30 days to 90 days and easing immigration procedures to make it more convenient for foreign tourists. However, exempting entry visas for tourists from China, India, and Russia is a different issue with security implications that needs careful consideration.
Tourism is playing a crucial role in boosting Thailand’s economy, as it has generated significant revenue for the country. In the first seven months of the year, tourism brought in 1.1 trillion baht, with foreign tourists contributing 638.2 billion baht.
The number of foreign tourists has increased by 384% compared to last year. However, the number of Chinese tourists has fallen below expectations due to the slower economic recovery in China. The government is implementing policies to attract more tourists, and it is hoped that an increase in arrivals from Malaysia will compensate for the shortfall.
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