Top-down recovery fails to lift masses
Thailand's farmers and low-income earners have yet to reap the benefits of the country's economic recovery because of falling crop prices and farm income in the first quarter, says a senior government official.
Agricultural prices and farm income contracted in the first three months despite Thailand's GDP growth expanding 4.8% year-on-year during that period, said Kobsak Pootrakool, minister to the Prime Minister's Office.
Agricultural prices for the period fell by 12.3% year-on-year, down from a 6% decline logged in last year's final quarter, according to data from the National Economic and Social Development Board (NESDB).
Nominal farm income contracted by 4.8% year-on-year, down from a 6.8% contraction registered in the fourth quarter, NESDB data showed.
Thailand's economic growth surged to a five-year high last quarter as rebounding farm output added to gains from exports and private consumption.
GDP rose by 4.8% year-on-year and 2% quarter-to-quarter on a seasonally adjusted basis.
Despite several rounds of government stimulus, a slowdown in the farm sector has persisted for four straight years, resulting in lower spending among farmers, Mr Kobsak said.
But a rise in oil prices, which are expected to hit US$70 a barrel by year-end, will help shore up farm prices and farm income, he said.
"Prices of tapioca, rubber, palm and rice from the main crop season are expected to improve by the end of this year," Mr Kobsak said.
Other factors contributing to improved economic growth are exports, public investment, private investment and tourism, he said, reiterating that consumption among farmers and low-income earners has yet to gain traction.
But higher agricultural prices contributing to improved consumption in the farm sector, expected to occur later this year, will help push GDP growth to 4.5%, Mr Kobsak said.
He said the economy next year should outpace growth of 4.5% because of large infrastructure projects in the Eastern Economic Corridor, including the 224.5-billion-baht investment in the high-speed, three-airport railway, the third phase of Laem Chabang port and the U-tapao aerotropolis.