Thai Deputy PM Outlines Plan to Tackle 'Four Economic Traps' in AI Era
Ekniti Nitithanprapas, Deputy PM and Finance Minister, champions 'Quick Big Win' strategy, focusing on BOI investment boost, upskilling, and new fiscal rules
- Thailand's government has identified four key economic traps hindering growth: an investment trap in outdated industries, a labour skills gap, a technology adoption lag, and a high-debt trap.
- To combat the investment trap, a 'Fast Pass' scheme will be introduced to streamline bureaucracy and attract investment in modern sectors like AI, Data Centres, and EVs.
- The plan addresses the labour and technology traps by allocating £225 million (10 billion baht) to re-skill the workforce and providing R&D grants and loans to help SMEs adopt automation.
- To tackle the debt trap, the government will facilitate the transfer of problem household debts to asset management companies and review its fiscal framework to limit incurring new public debt.
Thailand's Deputy Prime Minister and Finance Minister, Ekniti Nitithanprapas, has laid bare the nation’s key economic struggles, identifying four major 'traps' hindering growth and detailing the government's aggressive four-month plan to address them.
Speaking at the "Thailand Economic Outlook 2026: Out of the Trap” event hosted by Krungthep Turakij on Thursday (9th October), Ekniti acknowledged the short window of opportunity.
He stated, “The government is well aware of the time constraint of only four months. The economic team has therefore set a working guideline under the concept of ‘Quick Big Win’—to act fast and immediately.”
This involves accelerating short-term stimulus to revive the economy from its slump, while simultaneously pushing for long-term structural reforms and decentralisation to tackle inequality.
Ekniti drew a sobering comparison for the audience, reminding them that Thailand “was once the fifth Asian Tiger, but today we’ve become a patient. Yet, a patient has options: if they know what they are sick with and the cause of the problem, they will know how to treat it and can become strong again.”
The Four Traps and Government Solutions
The Minister identified the four economic barriers the country must overcome:
1. The Investment Trap
Ekniti noted that Thailand is perceived as having an "old image" and is stuck in traditional industries, missing the global shift towards AI, Data Centres, EVs, automation, and green economies.
Solution: The Board of Investment (BOI) will spearhead the push for investment in these modern sectors. A ‘Fast Pass’ scheme will be introduced to streamline bureaucratic bottlenecks—such as acquiring water or electricity permits and expediting work visas for skilled talent—that currently prevent approved projects from actually getting off the ground.
2. The People and Labour Skills Trap
The country faces a looming demographic crisis, with approximately 20% of the population over 60. This retiring segment faces reduced income and increased healthcare costs, placing a future burden on public finance. Furthermore, the existing workforce lacks the skills demanded by modern industries, a factor that drives foreign investors elsewhere.
Solution: The government will focus on Re-skilling and Up-skilling the labour force, allocating 10 billion baht from the Competitiveness Fund for short-term and online vocational training. The target is to train 100,000 workers in the first four months. The Thung Ngern app, used for previous subsidy schemes, will be adapted to offer training in revenue-generating skills, financial management, and tax to small businesses.
3. The Technology Trap
Many Thai businesses, particularly SMEs, have failed to keep pace with the rapid technological leap from digital transformation into the AI era.
Solution: The government will offer grants covering 50% of Research & Development (R&D) costs for SMEs, capped at 20 million baht for small firms and 50 million baht for larger ones. State financial institutions will provide Transformation Loans to support the immediate shift to automated machinery. A "Big Brother Helps Little Brother" scheme will allow large companies that contract work to SMEs to claim 1.5x or 2x tax deductions, encouraging local procurement.
4. The Debt and Fiscal Discipline Trap
The country is burdened by high household debt, which curtails spending and threatens to undermine small businesses before cascading to larger enterprises. At the state level, public debt is currently at 64% of GDP.
Solution: The Ministry of Finance and the Bank of Thailand are finalising a scheme this October to transfer problem debts from individuals to existing Asset Management Companies (AMCs), such as BAM and SAM, for quicker resolution. Furthermore, Ekniti pledged to review the Medium-Term Fiscal Framework (MTFF) in November to explicitly state the government’s commitment not to incur additional debt, aiming to reassure credit rating agencies.
Finally, to boost revenue, the tax system will be reformed by setting a clear ceiling on personal tax deductions. A key proposal is the Individual Saving Account (ISA), which will give people freedom to choose their investments within a deduction limit.
The Minister acknowledged that not all issues can be solved in four months but insisted that the plan would successfully lay the groundwork for long-term solutions.
