It's a slow recovery ahead
Thailand's economy is showing signs of improvement this year with predicted slow yet sustainable growth if all involved pitch in to help, Finance Minister Arkhom Termpittayapaisith says.
Speaking at the PostToday Forum 2022's virtual conference on Wednesday, Mr Arkhom said the economy is showing positive signs of recovery, though cooperation between the state and private sector is still needed to achieve economic growth by drawing in foreign investors and promoting domestic investment.
He also stressed the need to reduce bureaucratic red tape and cumbersome paperwork procedures to make it easier for businesses and individuals to obtain licences and approval from state agencies as part of efforts to promote investment.
"Thailand's economic recovery will be slow. While exports maintain a rising trend, tourist numbers are the main factor that must be taken into account.
"But I believe the recovery will become sustainable if all sides cooperate. Like other countries, Thailand's economy has been hit by Covid-19 over the past two years. Its GDP growth dipped to minus 6.2% in 2020 before improving slightly in 2021," Mr Arkhom said.
He also referred to VUCA, which stands for volatility, uncertainty, complexity and ambiguity, to describe the Covid-19 situation and efforts to deal with the pandemic over the past two years.
"However, from late last year until early this year, daily infection numbers were below 10,000, which was a good sign.
"In light of this, the Centre for Covid-19 Situation Administration decided to ease restrictions, including cancelling the Test & Go scheme, and reopening border checkpoints to revitalise border trade and tourism.
"Also, the export sector grew 20% last year. Export volume increased by 15% during the first three months [of this year]," the minister said.
The 1 trillion baht borrowed by the government under the first emergency loan decree in 2020 to mitigate the impact of the pandemic and the 500 billion it borrowed under the second emergency loan decree in 2021 have also helped prop up the economy. With the loans, government spending and investment have proceeded without a glitch, he said.
He added the government is speeding up disbursements under the budget law for fiscal 2022 while the private sector has mobilised funds to boost liquidity and invest in improving machinery and hotel facilities.
The government is also going full steam ahead with its flagship Eastern Economic Corridor to drive economic growth, he said.
Tax incentives have been offered to the electric vehicle industry, he said, adding the tax exemption measure will yield benefits in the future.
Commenting on the economic outlook this year, Mr Arkhom said the country is facing rising prices for fuel and fresh food products, which in turn has driven inflation to almost 5%, higher than the 1% earlier estimated.
The impact of high oil prices caused by the Russia-Ukraine conflict has been acute and the government has devised measures to control the prices of goods and curb the rising cost of living, he said.
"Regarding the 30-baht-per litre cap on the diesel price, the Energy Ministry estimates the [oil price] situation will persist longer than expected. So it is necessary to raise the cap in line with the oil price situation," Mr Arkhom said.
Starting on May 1, the government now only subsidises half the difference above the 30-baht mark. For example, if diesel sells at 40 baht a litre, consumers would have to pay 35 baht per litre.