Thailand’s economic outlook may be the worst in the region thanks to its heavy foreign dependence, outgoing Bank of Thailand Gov. Veerathai Santiprabhob said Friday.
Veerathai suggested the country’s needs economic restructuring to shift from relying too much on the foreign sector and grow the domestic economy.
Prime Minister Prayut Chan-o-cha will convene the first meeting of the Center for Economic Situation Administration on Aug. 19 where the Joint Standing Committee on Commerce Industry and Banking would propose new economic-stimulus measures.
The JSCCIB on Aug. 5 predicted Thailand’s gross domestic product would shrink by 7-9 percent this year due to plunging exports and the country’s foreign-tourist lockout. That forecast came a day after the even-more-pessimistic University of the Thai Chamber of Commerce warned the country was headed for its worst-ever recession with a historic 11.4 percent GDP drop this year, worse than during the 1997 Asiian Economic Crisis.
Veerathai believes it could take two years for the economy to return to pre- pandemic health. Although the economy bottomed out in the second quarter, the government cannot be optimistic because other countries, particularly Thai trade partners, are still facing the raging pandemic.
He also advised wise use of limited resources in the public and private sectors. The government’s measures should have specific targets and concerning higher unemployment rate, the government should create at least 1 million continuous jobs.
The JSCCIB plans to draft an economic-recovery plan with input from the Thailand Tourism Council, Thai National Shippers’ Council and the Federation of Thai Capital Market Organizations. It also will propose promotion for wellness tourism, high-value farm products, small-business opportunities, tax assistance for Covid-19-affected parties.
Interest rates, Veerathai advised, should remain low until a clear sign of economic recovery appears and depend upon the inflation outlook. Existing monetary and financial tools are more limited, so the government’s policies should be integrated, he added.
Veerathai, whose term expires Sept. 30, He said he was confident that his replacement, Sethaput Suthiwart-Narueput, will be able to continue the BoT’s strategies as he had six years of experience as a member of the central bank’s monetary-policy committee.
He suggested the new governor should push ahead with debt and business restructuring and create stability in the entire monetary system and commercial banking system, he added.