By Wichit Chaitrong
Poverty has been on the decline in the Kingdom for some years. As one of the wealthiest countries in the fastdeveloping East Asia and Pacific regions, Thailand boasts one of the lowest levels of extreme poverty as measured by the International Poverty Line of $1.90 (Bt60) per day.
However, at the more stringent uppermiddle income class poverty line of $5.5 (Bt180) a day, Thailand’s poverty rate of 7.1 per cent in 2015 was similar to its wealthier neighbour, Malaysia, according to World Bank East Asia and Pacific Economic Update figures released yesterday.
“Thailand’s poverty rate is estimated to be 4.8 per cent this year but we are worried that the decline may be slower in years to come due partly to the low price of farm products,” said Kiatipong Ariyapruchya, a senior economist at Thailand’s World Bank Office.
Global farm product prices have been diverging from oil prices – the latter is rising but the former remain low, a changing trend from the past, when commodity prices went up and down together.
While inequality in Thailand remains a challenge, the average incomes of the bottom 40 per cent of the population rose faster than the average increases enjoyed by the overall Thai population over the period 20102015, the World Bank said. Inequality declined in the long term but remains higher than most other developing East Asia and Pacific countries.
Kiatipong says the Thai government’s policy has been steered in the right direction, with more investment in infrastructure projects and the introduction of tax reforms.
Thailand’s economy will grow 4.5 per cent this year, 0.4 percentage points higher than it forecast in April this year, the World Bank said.
Public spending on infrastructure projects has been driving economic growth, which has quickened since 2013, according to yesterday’s report.
However, over the medium term, Thailand needs to improve its human capital and education system to increase its competitiveness, said Sudhir Shetty, World Bank chief economist for the East Asia and Pacific.
Thailand’s growth is expected to slow to 3.9 per cent in 2019 and 2020 due to a slowdown in public spending and exports.
Growth in developing East Asia and Pacific countries is expected to be 6.3 per cent in 2018, lower than the 6.6 per cent in 2017, due to the continued slowing of China’s growth as its economy continues to rebalance.
Risks include the impact of trade disputes and financial market turbulence, caused by the US rate rise, which has led to capital outflows from emerging markets, the Bank warned.