Unctad's Supachai warns Thais of challenges ahead

Unctad's Supachai warns Thais of challenges ahead

Thailand's economy can grow more than 5% next year if the country can speed up public investment, trade expansion with Asean and Asia as well as boost human resource development, says Supachai Panitchpakdi, former secretary-general of the UN Conference on Trade and Development (Unctad).

"We're encouraging the new government to accelerate labour quality development, infrastructure investment and amending existing laws which are deemed obstacles to trade and investment expansion," he said in a speech at a seminar hosted by the Commerce Ministry on the occasion of its 94th anniversary.

Mr Supachai said the economy was expected to see just "slight growth" from the preceding year, as the economy was now undergoing reform while government investment had been delayed for several months.

Exports to key markets such as the US, EU and Japan are also expected to grow at a slower pace.

Thailand avoided a technical recession after the National Economic and Social Development Board on Monday reported the economy expanded by 0.4% year-on-year in the second quarter thanks to expansion in both the agricultural and non-agricultural sectors after a contraction of 0.5% in the first quarter.

The economy expanded from the first quarter by 0.9% against a contraction of 1.9% in the first quarter.

A technical recession is defined as two straight quarters of negative growth as measured by seasonally adjusted quarter-on-quarter figures for real GDP.

The state planning agency also trimmed its forecast for full-year growth to between 1.5% and 2% from a range of 1.5% to 2.5% projected in May, and projected the economy may expand by 3.5% to 4.5% next year.

It cut its export growth estimate for 2014 to 2% from 3.7%.

Total investment was also revised down to a contraction of 2% from a contraction of 1.3%, with private investment forecast to contract by 2.9% compared with 0.2%.

However, Mr Supachai warned myriad challenges lay ahead next year.

"The US is now still struggling against a slowdown, while the EU has yet to recover as expected, leading to fears of a triple-dip recession," he said.

Triple-dip recession refers to a recession in which three periods of zero or negative growth are interspersed with short periods of recovery.

Mr Supachai said Thailand could no longer rely on trade and should focus instead on promoting foreign investment in sectors such as food, energy, biotechnology and border trade.

Do you like the content of this article?
COMMENT