July 10, 2024
BANGKOK – This time last year, Thais were hopeful that the return to power of the Pheu Thai party would ease the population’s woes by reversing declining consumer purchasing power, reducing high household debt and putting the brakes on the continuously slowing economic growth.
After all, from the beginning of their election campaign, Pheu Thai had emphasised economic policies as their main agenda. These included driving an average annual economic growth of 5%, stimulating the economy with a 500-billion-baht package via a 10,000-baht digital wallet scheme, reducing the cost of living, and raising the minimum wage to 600 baht per day within four years.
With Srettha Thavisin at its helm, the government began its work in September 2023, with Srettha also serving as the Minister of Finance and effectively leading the government’s economic team.
Yet 10 months on, there is still a lack of clarity and progress in addressing economic issues and advancing economic policies.
This is partly because y focusing on field visits across the country and trips abroad in the early part of his premiership, Srettha did not devote full attention to economic matters.
Eventually, he sought assistance by reshuffling the cabinet, appointing Pichai Chunhavajira as Deputy Prime Minister and Minister of Finance to oversee fiscal policies. This led to the formation of an economic cabinet to drive the government’s economic policies.
The Srettha government’s economic performance in its first year can only be described as subpar, as evidenced by economic indicators showing that the government has fallen short of its targets. For instance, the Gross Domestic Product (GDP) in the first quarter of this year grew by only 1.5%, the lowest in ASEAN.
Various economic agencies have downgraded their GDP forecasts for Thailand this year to an average of 2.4-2.5%.
A key factor for the low economic growth in the first quarter was the significant slowdown in government spending, both in consumption and investment, due to delays in the 2024 budget approval, which only took effect in May this year.
The delay in the 2024 budget was partly due to the digital wallet scheme, as the government adjusted the budget to allocate part of the 2024 budget to support this payout. This policy has faced significant hurdles, including financial and legal challenges, budgetary methods, and backend system preparations, such as registration and large-scale financial transaction systems.
Meanwhile, the government has tried to push budget allocations to local areas and provinces, as evidenced by the approval of 80 integration projects totalling 11.648 billion baht during cabinet meetings outside Bangkok.
In terms of attracting foreign investment, Srettha has travelled for roadshows and attended key international meetings in the US, Europe and Japan, meeting many top global business leaders. However, concrete results in attracting leading companies to invest remain unclear.
Although there has been an increase in investment promotion requests, actual investment figures, particularly in foreign direct investment (FDI), remain low. So far, large companies announcing investments in Thailand are primarily from China’s electric vehicle (EV) industry.
Meanwhile, large technology firms like Microsoft have announced investment plans in Thailand but have yet to disclose specific investment amounts. Negotiations with major corporations require ongoing efforts.
The failure to address economic problems has inevitably impacted the popularity ratings of both Srettha and Pheu Thai.
On June 9, NIDA Poll released a survey titled “Nine Months of the Srettha Government”, which assessed public satisfaction with the government’s performance over three quarters.
The survey found that 34.35% were somewhat dissatisfied, 31.69% were not satisfied at all, 25.19% were quite satisfied, 7.40% were very satisfied.
On June 30, NIDA Poll followed up with the “Quarterly Political Popularity Survey, Q2-2024”.
When asked who they would support for Prime Minister, 45.50% chose Pita Limjaroenrat from the Move Forward Party. Srettha landed just 12.85%, with Pheu Thai’s Paetongtarn Shinawatra coming in at 4.85%.
The popularity of Pita has been steadily increasing, in contrast to the declining ratings of Srettha and Paetongtarn.
In response to declining political ratings, key Pheu Thai figures are well aware of the negative signals but must come to terms with reality to varying degrees, as the past successes of the man widely regarded as chief still cast a shadow to this day.
In terms of strategy, Srettha and Pheu Thai are focusing more on proactive public relations.
Srettha recently launched the “Talk with Srettha” programme on Thailand’s national television, with the first episode airing on June 22, explaining his foreign trips.
However, the challenge of proactive PR lies in the fact that the government’s achievements have not yet materialised, particularly in addressing economic issues, as economic indicators continue to decline.
Even though the Srettha government has been in power for less than a year, the current sentiment towards the government is not very positive. From now on, it remains to be seen how the administration will adjust its strategy to accelerate economic progress.
They must also turn the tide to restore political ratings, helping to boost Pheu Thai’s popularity to match that of the leading party, Move Forward, which it must be remembered, garnered the most votes in last year’s general election.