Academics find wealth gains unevenly allotted

Academics find wealth gains unevenly allotted

Disparity in economic growth benefits

Commuters making their way on the skywalk at Chong Nonsi in Bangkok. PATIPAT JANTHONG
Commuters making their way on the skywalk at Chong Nonsi in Bangkok. PATIPAT JANTHONG

Thailand's economic recovery has provided twice the gains to business owners than received by the labour workforce, resulting in greater wealth accumulation among high-income households, says Thammasat University's economics faculty.

Based on data from the 2012 social accounting matrix by the National Economic and Social Development Board, and the growth of each business segment over 2018-19 forecast by Thammasat University's Faculty of Economics, a disparity in benefits from economic growth was detected among business operators and labourers, said Chaleampong Kongcharoen, vice-dean for planning and development at Thammasat University's economics faculty.

For income received among different classes of Thai households, an economic recovery would lead to a 10% greater gain for high-income households compared with gains received by lower-income households, said Mr Chaleampong.

While inequality can be viewed in two dimensions, income distribution and property distribution, existing policy may not be sufficient to improve income distribution, said Mr Chaleampong.

"The dismissal of tax privileges on long-term equity fund investment might help improve income distribution," he said.

Mr Chaleampong said Thailand should have a long-term economic structure that supports income distribution and reduce social inequality such as implementing a higher rate for personal income tax and use revenue for social welfare measures for distribution to the low-income class.

Tax policies, such as the land and building tax and inheritance tax, are other measures that Thailand has recently implemented to reduce social inequality, yet the tax rates may not be conducive for redistribution, he said.

Providing greater access for education opportunities and revising the minimum wage are other measures to tackle social inequality, he added.

Thailand's economic growth, meanwhile, is expected to expand by 3.3-4.5% next year, supported by continuous recovery in private consumption and private investment as well as global economic recovery, said Mr Chaleampong.

Private consumption and private investment are projected to increase by 4.7% and 4.1%, respectively.

Domestic factors considered risks for growth prospects include the general election, which could affect private consumption and investment, delays in public budget disbursement process and higher household debt stifling consumer spending, he said.

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