Thailand's Economy Grows Slowly, At Risk of Being Overtaken by ASEAN Neighbors

The University of Commerce points out Thailand's low economic growth and recommends that the new government restructure and urgently develop workforce skills to prevent a rapid drop in ASEAN economic rankings. Thanawat Polwichai, President and Chief Advisor of the Economic and Business Forecasting Center at the University of Thai Trade Association, revealed that Thailand has been trapped in low growth, averaging around 2% annually for over 5 years. Once hailed as an 'Asian economic tiger', Thailand is now compared to a 'comatose patient' amid structural problems including an aging society, household debt nearing 90% of GDP, and political uncertainty. The International Monetary Fund (IMF) estimates that Thailand's economy will expand less than 3% annually in the next five years, well below the national strategy target of 5% growth needed to become a developed country. Since the COVID-19 crisis, Thailand's economy has not expanded beyond 3%, despite GDP returning to pre-pandemic levels. Thanawat identified four key reasons for low growth: 1) rapid aging population and declining birth rates, 2) labor shortages and slow domestic market growth, 3) weak personnel capabilities in science, technology, and digital sectors, and 4) continued reliance on traditional industries with low-value exports. If these structural issues are not seriously addressed, Thailand's economic ranking in ASEAN is likely to decline. Currently second in the region after Indonesia, Thailand has already been overtaken by Singapore, and may fall behind Malaysia and Vietnam in the coming years. Despite the challenges, Thanawat believes Thailand's economy is not truly 'comatose' and has recovery potential if the new government quickly restructures, shifting from domestic market dependence to becoming a production and distribution center for ASEAN and the Greater Mekong Subregion.