December 10, 2024
BANGKOK – Two bankers have given Prime Minister Paetongtarn Shinawatra’s performance in reviving the economy during her first three months in office a positive review but say several tasks still need to be accomplished.
Amonthep Chawla, executive vice president and head of the research office at the CIMB Thai Bank, noted that the Paetongtarn government had to resolve the economic issues inherited from the previous government, which had failed to stimulate the economy.
The Thai economy had been made worse by this year’s flooding, falling crop prices and continued regression, he added.
Amornthep also commented favourably on the government’s hand-out of 10,000 baht to 14 million vulnerable people, namely state welfare holders and the disabled, but added that he would like to have seen the recipients receive some education in how to use the cash to generate income. He hoped the government would bear this in mind when making future payments under the programme.
He praised the Paetongtarn government for continuing former PM Srettha Thavisin’s mission of wooing foreign investors to come to Thailand.
Noting that Chinese companies could be expected to move their production bases to Thailand to counter the tariffs announced by US president-elect Donald Trump, and the inevitable exacerbation of the trade war with China, Amornthep nonetheless advised the Paetongtarn government to be on alert for fallouts from external factors, such as wars and trade wars.
He said the government should also be careful about its spending, stressing that if it wanted to continue the 10,000-baht handout programme, it should make sure the recipients would use the money to stimulate the economy. Another recommendation was to invest more in basic infrastructure.
Burin Adulwattana, chief economist of Kasikorn Bank’s Research Centre, echoed Amornthep’s view that Paetongtarn’s government had been doing a good job over the past three months, specifically mentioning the building of stability in the fund market through the Vayupak Fund.
However, he felt the government should do more to build confidence by having the Stock Exchange of Thailand and the Securities and Exchange Commission announce and enforce measures against corruption and fraud in the stock market.
Burin praised the government for trying to reduce the electricity rates and amend the law to reduce energy costs, adding that he would like to see a freeing up of the market in solar panels and enhanced use of photovoltaics to generate electricity, thus further reducing electricity costs.
Burin also called on the government to speed up the entertainment complex project, which would boost tourism and property development as well as generate a significant number of jobs.
In the meantime, he advised the government to postpone its plan to raise VAT from 7 to 15%, saying neighbouring countries set their rates at only 9-10% VAT.
He also recommended that the government try to expand the income tax base by lowering the rate and boosting employment for some 10 million potential tax payers, noting that this would also raise GDP.