Infrastructure key for Thai growth

Impact of stimulus schemes quickly fade

- NUNTAWUN POLKUAMDEE

Continued infrastructure investment by the next government is needed for sustainable growth after the impacts of short-term stimulus fade, says InnovestX Securities.

Short-term economic stimulus measures introduced by the next government are expected to provide temporary relief, though sustainable growth will depend on continued infrastructure investment and policies that encourage long-term savings, says InnovestX Securities.

Piyasak Manason, head of economic research at InnovestX, said populist stimulus schemes such as cash handouts, debt relief, consumption incentives, tax rebates for domestic tourism, and receipt-based lottery programmes may help support consumption in the near term, but their impact typically fades quickly.

“If the goal is sustainable growth, infrastructure investment must take priority,” he said, noting all major political parties have proposed large development projects.

For example, the Bhumjaithai Party focused on supporting small and medium-sized enterprises through lower funding costs, market access and technology adoption, alongside a nationwide household solar power programme aimed at reducing electricity bills. The Pheu Thai Party proposed positioning Thailand as a regional medical hub, advancing large projects, expanding double-track railways and upgrading airports.

Meanwhile, the People’s Party outlined plans for major projects such as smart grid development and artificial intelligence-driven water management systems supported by data centres.

“Such projects, if implemented effectively, could generate long-term economic momentum beyond short-lived fiscal stimulus,’ said Mr Piyasak.

However, fiscal policy alone is insufficient. Stronger coordination between fiscal and monetary policy is needed to support growth, particularly as inflation remains subdued, credit growth is negative and the baht has strengthened, he said.