Tuesday, June 18, 2024

Thailand’s aging population hits consumption and economic growth

Thailand’s economic growth heavily relies on domestic consumption, which is impacted by an aging population and declining birth rate. The government must adjust its economic model to increase incomes and support SMEs. Thailand has transitioned from an aging to an aged society, with the elderly population growing rapidly, posing economic challenges and opportunities for the finance industry.

Economic Impact of Demographic Changes in Thailand

The demographic changes in Thailand, including an aging population and declining birth rate, are significantly impacting the country’s domestic consumption. This has been a major driver of economic growth in Thailand, with the economy heavily reliant on domestic consumption. The high cost of living, sluggish economy, and high household debt are contributing to lower domestic consumption in Thailand, a trend that could worsen if the birth rate continues to fall.

Challenges and Recommendations

The study by the Kasikorn Research Centre highlights Thailand’s higher reliance on domestic consumption compared to other countries in the region. Factors such as lower productivity and incomes in the agriculture sector affect purchasing power, especially for the elderly population. To address these challenges, the Thai government needs to adjust its economic model to increase incomes, improve the quality of life, and support small and medium-sized enterprises in adapting to the changing economic environment.

Transition to an Aged Society in Thailand

Thailand is rapidly transitioning to an aged society, with the share of the elderly population doubling in less than 20 years. By 2023, 13.6% of the population was aged 65 or over, and this proportion is expected to grow to more than 20% by 2029. As Thailand moves towards becoming a super-aged society, it faces the challenge of being old before it is rich. The government must address the implications of these demographic changes to ensure sustainable economic growth and support the well-being of its aging population.

Source : Thailand’s aging population hits consumption and economic growth

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