Thailand’s economy has had an uncertain outlook ever since the trade war between the US and China began. Add to this a delay in state spending and one can begin to see why analysts are concerned.
As such, due to the delays in both public and private investments, the Deputy Prime Minister, Dr. Somkid Jatusripitak, insisted that about 1 trillion baht of the government’s budget be spent to stimulate the Thai economy.
During a seminar titled “2020 – Year of Investment: Solution for Thailand”, the Deputy Prime Minister said that the Thai economy has to be well-managed because there are three major risk factors that threaten the economic ecosystem.
One of these risk factors is the contraction of the Thai baht in November 2019. The ongoing trade war caused a 7.7 percent contraction and affected 70 percent of the nation’s GDP. The slow reaction of the state to disburse funds had affected many investment projects and only 50 million baht in investment funds were injected into the country in the fourth quarter of 2019.
Another problem is the strengthening of the Thai baht. Exporters in particular have suffered from it, while some potential investors have postponed their investment plans for Thailand. Following parliament’s approval, the government’s 3.2 trillion baht budget is expected to be fully disbursed in September this year. The government is also promoting investment in the Eastern Economic Corridor (EEC).
The Deputy Prime Minister stated that the government has already prepared the necessary infrastructure to support further investment. This includes things such as high-speed train routes linking Suvarnabhumi, Don Meuang, and U-Tapao airports, along with U-Tapao airport and Map Ta Phut and Laem Chabang ports.
With the advent of 5G, the Thai government will soon hold a 5G spectrum license auction, as the technology is seen as an important driver for the economy. Current investment structures are also shifting towards low-cost industries that produce high-value goods and services, particularly the tourism sector along with the food and agriculture sectors.