'GDP growth target remains elusive'

According to the latest World Bank forecasts, Thai economic growth this year and next year will be lower than expected. However, the government, led by Prime Minister Sretta Thavisin, has set an ambitious target of raising the annual GDP growth rate to 5 percent.

In his policy address to government agency heads last week, the prime minister discussed the budget for fiscal year 2024. Last week, the World Bank also lowered its growth forecast for Thailand this year to 3.4 percent from 3.6 percent and trimmed its 2024 forecast to 3.5 percent from 3.7 percent. Despite a delayed budget allocation, a stagnant export sector and the latest blow to tourism after the shooting at the Siam Paragon shopping center, for''To some industry executives, achieving 5% growth may seem too optimistic. In the past decade, Thailand's economy grew at no more than 4%, so there is a minimal chance the economy can achieve 5% growth during Mr. Sretta's administration, said Aat Pisanvanich, director of the Center for International Trade.

During the speech, the prime minister unveiled plans to stimulate growth in the form of creating a 10,000 baht digital wallet for citizens over 16, raising the minimum wage to 600 baht a day and increasing the minimum wage for graduates with bachelor's degrees to 25,000 baht a month.

But some experts believe such measures will raise costs for business operators and''subsequent inflation, reduction of domestic spending and production capacity. The main problem is the lack of export growth, as exports account for about 70% of the country's GDP. The government's interim forecast to 2027 assumes GDP growth of 3.2% in 2024, 3.6% in 2025 and 3.4% in 2026-2027, with a budget deficit of about 3% of GDP. Public debt is expected to reach 64-65% of GDP in 2024-2027.

One of the obstacles to achieving 5% growth is problems in the export sector, said Aat Pisanvanich, director of the Center for International Trade. Structural problems''Thailand's production costs are the first reason that makes the country less competitive with its regional rivals, especially in terms of fuel and electricity prices. The second reason is the lack of innovation in Thai firms compared to rival firms, especially Vietnam. Vietnam is actively pursuing a bio, circular and green economy model, which is in line with current global trends. Also, Thailand faces a shortage of skilled labor compared to Singapore, Vietnam and Malaysia.

In view of these challenges, achieving 5% growth will be difficult even if the government stimulates the economy. Industry experts have also expressed concerns in''regarding tourism, which accounted for 18% of the country's GDP before the pandemic, as the tourism industry has faced many obstacles that cannot be controlled. For example, the Chinese market has unfavorable conditions due to the country's slowing economy and negative perceptions of security in Thailand.

Despite the government's ambitious goal of achieving 5% growth, experts believe the target may not be realizable. However, they have hope for long-term growth in Thailand's economy, again based on investment. Thailand can attract foreign investors, especially from China and Taiwan. In addition, US technology companies have also shown interest in Thailand's potential, and the business sector has always supported government measures to'