Uncertainties in domestic politics, economic policies and the external front over the past 14 years led to losses to Thailand's GDP worth 4.9 trillion baht, according to a research paper.
The export and investment sectors were most affected by GDP losses ushered in by these uncertainties, with the latter experiencing a loss of investment worth 30 billion baht as external headwinds heightened in 2008, according to research jointly conducted by personnel from the Bank of Thailand, Chulalongkorn University and the Puey Ungphakorn Institute for Economic Research.
These uncertainties covered shifts in Thailand's fiscal and monetary policies from political changes, sporadic domestic political turmoil, rising economic uncertainties (the 2008 global financial crisis, the 2011 flood disaster and the Covid-19 pandemic) and global events spurring uncertainties (the Sino-US trade war, Brexit and the 2020 US presidential election).
Economic uncertainties resulted in the most severe impact, followed by changes in fiscal and monetary policies, external uncertainties and domestic political uncertainty, according to the research.
Researchers recommended fewer changes to economic policies, improving workers' skills and adjusting the structure of potential businesses as well as overseas diversification in the private sector as solutions to cope with uncertainties.
Meanwhile, improving the economic productivity and competitiveness is needed as a part of economic reform, says the Bank of Thailand.
The move will sustain the country's long-term economic expansion and prepare for new behaviour in the post-Covid-19 period, said outgoing governor Veerathai Santiprabhob.
Provincial economic support is an important area for reform, and the coronavirus outbreak provides an opportunity to strengthen the local economy, said Mr Veerathai.
Around 1 million workers have returned to their hometowns to work in the agricultural and non-farming sectors during the pandemic, he said.
Some of them are skilled labourers who are familiar with technology and digital innovations, said Mr Veerathai.
Strengthening the local economy can also enhance Thailand's productivity, competitiveness and immunity, as well as reduce economic and social inequalities, he said.
Small and medium-sized enterprises (SMEs) and individuals involved with upcountry farming have faced economic and social inequalities for a long time in areas such as financial service accessibility, income building and business opportunities, said Mr Veerathai.
The government should strike a balance between budget spending and functioning market mechanisms, he said.
Assistance measures should be targeted rather than implementing blanket policies to specifically address the problems of affected people and businesses, said Mr Veerathai.
Given the government's restricted resources and budget, blanket policies will not fully benefit the overall economy compared with targeted resource and budget spending, he said.
"Blanket policies could weaken fragile SMEs to lack business motivation, transforming them into zombie companies," said Mr Veerathai.
"Such assistance could also distort the overall economic structure."