Ekniti warns oil prices will remain high for another 2 years, prepares Thai Helps Thai Plus program for cabinet approval tomorrow

Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas discussed Thailand's first-quarter 2025 GDP expansion of 2.8%, compared to 2.5% in the previous quarter, noting that the standout indicator was total investment growth reaching an 11-year high. Private sector investment surged 10.1%, up from 6.5% growth the previous quarter, coinciding with the Board of Investment's (BOI) Fast Pass unlocking easier investment pathways. Government spending acceleration policies also drove public investment growth to 9.4%, while export indicators remained strong due to accelerated shipments amid Trump tariff measures.

"This quarter's GDP growth stems from two main engines: aggregate investment leading the charge, alongside export acceleration triggered by Trump's tariff measures," Ekniti explained. "These two prominent engines reflect what the Finance Ministry intends to achieve as short-term stimulus with long-term benefits. Currently, it feels like we're looking in the rearview mirror at positive results that occurred before Middle East tensions, but the road ahead remains uncertain and concerning."

Despite GDP expansion from the previous quarter, which resulted partly from pre-conflict Middle East conditions, concerns remain about uneven investment distribution affecting small and medium enterprises and ordinary citizens, as well as energy and economic crises stemming from Middle East tensions. Oil prices are expected to remain elevated for another 1-2 years, driving higher inflation and cascading crises. Consequently, the government must prepare accordingly.

Ekniti stated that tomorrow's cabinet meeting (May 19) will approve a 200-billion-baht debt financing plan and the Thai Helps Thai Plus program to assist citizens impacted by Middle East conflict crises, specifically addressing cost-of-living pressures. The borrowing will simultaneously support cost-of-living relief and long-term impacts mitigation while enabling energy transition investments. The 200-billion-baht fiscal year borrowing will maintain public debt at 68% of GDP, within the established ceiling, with expectations that investments will boost GDP growth and subsequently reduce the public debt-to-GDP ratio.

Additionally, the Finance Ministry is coordinating with the Transport and Agriculture ministries to roll out targeted farmer assistance measures, including a fertilizer subsidy program, as farmers face hardship from fertilizer raw material price increases stemming from Middle East tensions. Energy transition measures will also address transport sector impacts from elevated oil prices.