DEPUTY Prime Minister-cum-Finance Minister Ekniti Nitithanprapas is pursuing reforms in three areas of the Thai economy, energy transition, addressing the aging society, and upskilling the workforce for future industries, in aiming to take the Thai economy back to 3%++ growth, Naewna newspaper said this evening (July 25).
Speaking at an Economic Journalists Association’s function on the topic of “The Potential of the Thai Economy and Government Measures for Economic Recovery” Ekniti said the overall picture of the Thai economy today, if viewed as an airplane, shows that for many years, the plane has been flying at an angle because it has relied on a single engine: exports.
When the global economy is bad, the Thai economy suffers as well.
Meanwhile, the domestic picture remains weak, with investment and consumption at consistently low levels. At the same time, government intervention to stimulate the economy has led to a continuous increase in government debt.
His focus right now is balancing the Thai economy’s growth engines by pushing both private and government investment.
“My work as Deputy Prime Minister and Minister of Finance over the past seven months has been focused on making investment drive economic growth. The results today show improved economic performance across almost all indicators.
“Private sector investment grew by approximately 10% in the first quarter of this year, and I aim for government investment, both by government agencies and state enterprises, to grow by 9.4%. Growth driven by investment is more effective than growth driven by consumption, which is quickly depleted,” he said.
However, there are two dangerous indicators to watch: rising inflation and the current account deficit. The Thai economy cannot grow solely with its engines; it needs good fuel. Good fuel means sturdy stability, and the indicator of stability is the inflation rate.
Inflation, which was negative in the first quarter, rose to 2.7% in the second quarter due to higher energy prices. This will impact the cost of living and consumption in Thailand and has to be managed well.
“If we let the fuel quality deteriorate, the engines could break down.
“The other dangerous indicator is the current account deficit, meaning Thailand’s expenditures exceed its income.
“Our finances show a decline. In the past two months, we’ve had a current account deficit of $14 billion, or approximately 600 billion baht,” he said.
Ekniti added that the changing global trade structure has led every country to try to form groups and negotiate trade agreements with each other thus Free Trade Agreement negotiations are now an essential tool for Thailand.
An opportunity amidst the war is the relocation of production bases by investors. Everyone wants to find a safer country to expand their investment, and a portion of this investment is coming to Thailand, as seen in the significant increase in investment promotion applications to the Board of Investment (BOI). Even better, this investment is in future industries, and Thailand must seize this opportunity to become part of the new global production chain.
“Investors coming in demand clean water and clean electricity. I’ve unlocked direct Power Purchase Agreements, allowing this without quotas, accelerating the development of Thailand’s clean energy sector,” he said.
Ekniti added that another important factor is improving Thailand’s economic potential as growth used to be 5-7% per annum but now it is only 2.7%.
“Unfortunately, the birth rate is low. However, with an aging population, three things need to be done: how to make Thai people more skilled, how to enable older people to work longer, and how to attract more talented people to work in the country. The goal is to boost the economy’s potential to 3% or more.”
To achieve this, he is focusing on three reforms: firstly, reforming the country’s energy transition, which will be done transparently; secondly, reforming to support an aging economy; and thirdly, reforming ways to improve Thai labour skills.
“I’m working on the Skill Bridge project to enhance the skills of Thai workers for modern industries. In promoting investment, we emphasise using skilled Thai labour and domestic raw materials. We’re also adjusting curricula to align with job demands and new industries with high wages, as well as accelerating the channelling of development and talented people to provincial areas to increase income distribution,” he said.
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Top and Front Page: Deputy Prime Minister-cum-Finance Minister Ekniti Nitithanprapas. Photos – Naewna
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