Prayut II govt facing ‘four big economic challenges’
The incoming government will face four big economic challenges in the second half of this year, a former senior finance official has warned.
Worapol Sokatiyanirak, former chair of the National Legislative Assembly’s Finance, Banking, Financial Institute and Capital Market Sub-committee, delivered the warning during his speech on “Thailand’s Strategy to Deal with Global Economic Crisis” at the National Institute of Development Administration.
Worapol said the first challenge was the ongoing US-China trade war, which could escalate into a currency war and impact the global investment atmosphere – especially for export-reliant countries like Thailand.
The second challenge for Thailand is the economic crisis in Europe, which stems from the debts of southern European countries, problems surrounding immigration, the low employment rate, and instability of the EU after Britain leaves the Union.
The third is Thai household debt that has risen by over Bt1 trillion to Bt12.8 trillion in the last year and now accounts for 78.6 per cent of the country’s GDP.
Worapol also pinpointed migration of manufacturing to Vietnam and Indonesia due to Thailand’s slow economic growth. To counter the trend, the government may need to reduce corporate tax for international companies from 20 to 12 per cent to attract more foreign investors, he said.
He also urged the new government to curb the strong baht in the next six months. This could be achieved, he said, with a 0.25 per cent cut in the policy interest rate to accelerate economic growth, along with clarification of long-term policies on infrastructure investment, networking with neighbouring countries, boosting agricultural products’ value, and building bases for the digital, creative and health economies.
