Supattanapong lists risk factors that are being addressed
Despite growth prospects, the Thai economy still has to brave a spate of risk factors such as high inflation, soaring energy prices, persistent Covid-19 outbreaks and relatively hefty household debt, says Deputy Prime Minister Supattanapong Punmeechaow.
According to Mr Supattanapong, rising inflationary pressure driven by recovering global demand and the escalating conflict in Europe may affect global energy prices. This uptick in prices may pose a short-term risk to the country's economic growth, he said.
"The government is crossing its fingers that the international conflict should not escalate," said Mr Supattanapong.
"All responsible state agencies are closely monitoring this issue."
However, he insisted the government has prepared measures in advance to alleviate the impact of higher global oil prices such as a continued cap on diesel prices at a level that can support the country's economic recovery and maintain the country's competitiveness.
Mr Supattanapong said the government aims to grow the domestic economy this year by 4%, helped largely by increased investment and the reopening to foreign tourists.
The government's planning unit revealed on Monday the Thai economy expanded by 1.6% in 2021, recovering from a 6.2% contraction in 2020.
The improvement stemmed largely from a surge in exports, improving private consumption, growing investments as well as recoveries in agriculture, forestry production, fisheries, manufacturing, and the wholesale and retail trade sectors.
The National Economic and Social Development Council is maintaining its 2022 forecast for economic growth at 3.5-4.5%.
Growth this year will be supported if the government can contain the spread of the Omicron variant without any more restrictions, the anticipation of rising demand, a recovery in domestic tourism, the ongoing growth of exports and higher public investment, he said.
According to Mr Supattanapong, the government has prepared 90 million doses of vaccines this year, which should be sufficient to contain Covid-19 infections.
The government also pledges to relax step-by-step its strict containment measures for foreign visitors to revitalise the tourism sector, which contributed 20% to GDP in 2019.
Regarding economic management for 2022, he said the government looks set to implement various measures to improve growth and continue easing safety measures to facilitate travel for both domestic and foreign visitors.
Mr Supattanapong said in the longer term, the government remains committed to continuing infrastructure development and Eastern Economic Corridor (EEC) development, while speeding up government expenditure.
The government wants to draw as much foreign investment as possible, notably in new S-curve industries such as electrical vehicles (EVs), smart electronics, digital, pharmaceuticals, and creative industries, he said.
The ad hoc committee handling measures to attract foreign investment chaired by ML Chayotid Kridakorn, the former senior country officer and managing director of JPMorgan Thailand, projected 1 trillion baht of new investment will come from foreign investment within two years, mainly from EVs and upstream electronics.
The EEC scheme will be a crucial part of the state's efforts to boost the economy, with 2.2 billion baht of investment headed to the scheme over the next five years, aiming to turn the area into a new high-tech industrial hub, said Kanit Sangsubhan, secretary-general of the EEC Office.
With a focus on 12 targeted S-curve industries, including next-generation cars, smart electronics as well as logistics and aviation, the EEC area in parts of Chon Buri, Rayong and Chachoengsao provinces will become an attractive investment destination for Thai and foreign investors, he said.
"The EEC will help the Thai economy recover from the pandemic and grow sustainably," Mr Kanit said.
Four years ago, the government and investors had already spent 1.6 trillion baht developing the EEC zone.
He expects Thai economic growth to take at least 12-15 months to return to the levels recorded before the pandemic hit the country in early 2020.
"The EEC will be inseparable from measures to drive the economy. If GDP keeps growing for seven consecutive years, Thailand will eventually escape the middle-income trap," said Mr Kanit.