Growth to hit new depths

Thailand's economic growth this year is set to sink to a decade-long low, excluding the Covid-19 shock, as deep-seated structural problems, corruption and grey capital continue to weigh on the economy, Bank of Thailand governor Vitai Ratanakorn has warned.

- SOMRUEDI BANCHONGDUANG

Speaking at an economic seminar in Bangkok yesterday, the governor said Thailand's gross domestic product (GDP) is expected to expand by only 1.5-1.7% this year, a pace that would mark the lowest growth rate in over 10 years outside the pandemic period.

The slowdown, he said, is not driven solely by domestic weaknesses but is compounded by persistent global uncertainties, including geopolitical tensions, trade conflicts and a rapidly changing international economic order.

Thailand's economic challenges, he said, are fundamentally structural in nature. One of the clearest indicators of vulnerability is household debt, which stands at around 87% of GDP, far higher than the 40 to 60% typically seen in many other economies.

Liquidity conditions have also deteriorated as lending to small and medium-sized enterprises has contracted for 13 to 14 consecutive quarters, or more than three and a half years, severely limiting the economy's ability to expand.