Kobsak Pootrakool, deputy secretary-general to Prime Minister Prayut Chan-o-cha for political affairs, is considered one of the premier's key economic advisers. He is also the secretary of the economic cabinet and tipped to be appointed soon as the head of an ad hoc committee tasked with monitoring the performance of economic agencies as assigned by the economic cabinet.
Mr Kobsak shared his views with the Bangkok Post on Thai economic and export prospects amid growing international threats, especially weak global demand and an escalating trade war.
"I would like to explain to the public that the global economy is not in critical condition. It is just in a downturn despite four downgrades of global GDP by the IMF since last October," he said.
World trade, the manufacturing index and the purchasing managers' index all show negative trends, be it in the US, Japan, China or the euro zone, with many countries reporting a contraction in exports in the second quarter. Thailand was no exception, with outbound shipments shrinking 4% in the first quarter and 4.2% in the second quarter, said Mr Kobsak.
"Given such poor global prospects, the economy may grow by only 2.7% this year if there are no stimulus measures to boost consumption. The stimulus measures passed last week by the cabinet should help the economy to reach 3% growth this year," he said.
"The trade war offers both problems and opportunities for Thai exporters. In the first quarter certain Thai export items to the US saw strong growth of 17-50%, while some items bound for China gained 30-90%.
"However, the risk factor I am quite concerned about is the yuan's depreciation. The Chinese government is believed to be weakening the yuan as a tool to fight the US."
Mr Kobsak said such a policy would affect Thai exports, hurting their competitiveness, which poses more of a risk to the Thai economy.
The baht is the top-performing currency in Asia, up 5-6% against the US dollar in the year to date. As of Aug 26, the baht was quoted at four per yuan, compared with six baht per yuan in late 2016.
The ongoing trade row between the US and China is unlikely to end soon, with more drastic measures as neither side wants to back down on tariffs, he said.
"We should not be worried about such challenges. It is better to look forward and prepare for the future," said Mr Kobsak.
"The economic cabinet is the best solution to make the coalition government's policies run smoothly."
The initial stimulus measures worth 316 billion baht are expected to help boost the economy between 0.3 and 0.5 percentage points.
The first package is aimed at assisting low-income earners, farmers and small and medium-sized enterprises.
Amid the baht's appreciation, private companies should step up machinery imports to upgrade production, or invest in efficiency as the global economy recovers, he said.
Additional stimulus measures are in the pipeline, said Mr Kobsak.
The Board of Investment (BoI) is scheduled to propose to the economic cabinet at its meeting tomorrow a relocation package for foreign investors wishing to shift from China to Thailand. The package will focus largely on headquarters, research centres, talent and high-technology industry.
The BoI's new investment package aims to promote Thailand as a base for investment for these four groups of businesses.
The government is set to use all tools from related economic agencies to give Thailand an investment advantage amid higher competition from Vietnam and Indonesia, he said.
The Commerce Ministry is also required to propose to the economic cabinet measures to stimulate exports, promote border trade and seek new export markets.
The economic cabinet's subsequent meeting in mid-September is expected to focus on accelerating infrastructure projects, especially mass transit projects.
Infrastructure projects should be accelerated amid the baht appreciation so private firms can rev up improving their machinery.
The Transport and Finance ministries are preparing their new time frames now to speed up megaproject development.
