Tuesday, June 18, 2024

Has Thailand become the sick man of Asean

Thailand’s economic growth has been hampered by political crises and poor management. Budget delays and structural issues have led to sluggish growth, with the auto industry falling behind Malaysia.

Thailand’s Economic Struggles

Thailand’s prolonged political crisis and poor management of the economy over the past few decades have taken a huge toll on the country’s growth. The Thai economy grew just 1.5 percent in the first quarter of this year after having expanded 1.7 percent in the fourth quarter of last year and 1.9 percent for the full year in 2023, according to state-owned think-tank National Economic and Social Development Council. The country has been bogged down by sluggish growth for decades since the 1997 financial crisis.

Budget Woes and Industry Decline

One of the major causes of the economic stagnation in Thailand has been the time lag in disbursement of the fiscal 2024 budget due to delays in its passing by Parliament. Additionally, the uncertainty facing the auto industry has impacted Thailand’s standing as the “Detroit of Asia”, with Malaysia overtaking Thailand in auto sales. As household debt rises to 91 percent of GDP and economic growth slows, Thailand is struggling to keep pace with other ASEAN countries in terms of economic performance, raising concerns about its ability to attract foreign investment and improve its overall economic outlook.

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