After facing criticism for neglecting local media and prioritising foreign outlets, Bank of Thailand governor Sethaput Suthiwartnarueput finally held a press conference to share his overview of Thailand's economic situation and the central bank's policy stance.
The governor has often talked to foreign media about his views on the Thai economy.
His latest perusal is crucial. Mr Sethaput highlighted a significant issue that Thailand's GDP is expected to grow by only 3% over the next five years. This rate is lower than the 4–5% annual growth seen in the past decades, signalling a slower economic recovery compared to other countries.
From 2004 to 2013, Thailand's potential economic growth averaged 3.8% annually, with actual GDP growing at an average of 4% per year. However, from 2014 to 2023, this potential dropped to 2.7%, with actual GDP growth slowing to about 2.8% annually.
Mr Sethaput said the economic slowdown stems from Thailand's heavy reliance on the tourism sector, which has struggled to rebound as quickly as other industries. Additionally, various structural issues, especially within the manufacturing sector, and high household debt are significant barriers to robust economic growth.
Mr Sethaput urged the country sorely needs major structural reforms. While short-term measures like the government's 500-billion-baht digital wallet scheme might stimulate the economy temporarily, they do not address the underlying issues or strengthen long-term growth prospects.
Mr Sethaput said the country must invest in new technologies and implement sweeping structural reform to achieve sustained growth exceeding 3%. Without a major overhaul, short-term stimulation measures will only lead the growth rate to revert back to about 3%, he said.
This outlook from the Bank of Thailand stands in contrast to Prime Minister Srettha Thavisin's optimistic target of 5% annual growth.
But achieving such rapid growth without structural reforms will inevitably require massive financial injections into the economy to provide short term tonic, without any foundational improvements. The crucial question remains whether even this 5% growth target is realistically attainable.
The BoT's governor's perspective again highlights the government's failure to address the root structural issues of Thailand's economic challenges. Instead, the government appears to be pursuing superficial policies aimed at short-term growth.
This is reflected in the 2025 budget bill, where only 398 billion baht of the total 3.75 trillion baht is allocated for strategies to enhance competitiveness.
In contrast, a substantial 923.8 billion baht is designated for social equity, including populist policies, with an additional 645.9 billion baht earmarked for public administration and digital scheme developments. This allocation suggests the government is either not correctly prioritising tackling the fundamental issues or is focusing on short-term solutions with a political agenda in mind.
The distinction between an ordinary government and a memorable one lies in its focus. An ordinary government aims for immediate achievements during its term, while a memorable government works towards the country's long-term prosperity, even if it won't be in power to witness the results. What kind of government does Prime Minister Srettha aspire his to be?