Thailand now 'the sick man of Asean

ECONOMY TALK Chartchai Parasuk

- Chartchai Parasuk

The inspiration for this article comes from the International Monetary Fund's (IMF) World Economic Outlook (WEO) report for the month of October.

As usual, the organisation conducted a quarterly review of the world economy, including GDP growth projections for member countries.

Some of the projections surprised me as Thailand's expected GDP growth for 2026 ranked the lowest among the 10 member nations of the Association of Southeast Asian Nations (Asean), and the second-lowest (1.6%) in Asia after Japan (0.6%).

We know things are not going great in Thailand, but to suggest GDP growth will lag that of Myanmar (3.0%), Laos (2.5%) and Cambodia (4.0%) especially by such a large margin - is not only likely inaccurate but insulting.

The IMF projects the kingdom will see 2.0% GDP growth this year. If readers do not feel embarrassed by this point, please look at the attached table.

The title of this article, "Thailand now 'the sick man of Asean", actually could not be further from the truth. Nonetheless, things are bad. This article still makes the point that the economy is in a coma and needs an urgent turnaround.

Political propaganda and small fixes will not do the job. Policymakers should stop dreaming that there are easy solutions. Solutions will not only be difficult but also painful.

For a good example of painful solutions to turn the economy around, we can turn our attention to Argentina.

The country was previously plagued by 200%-plus inflation rates that mutilated its economy. The Argentine peso even lost 45% of its value within a single year. Even the IMF gave up hope on controlling the level of skyrocketing inflation there.

Newly installed President Javier Milei performed a de facto miracle by pushing inflation down to the 30% level. Many thought his hostile spending cuts of 30% and massive market reforms would cost him his political future.