On Wednesday, caretaker Finance Minister Pichai Chunhavajira warned that Thailand’s economy is nearing a crisis due to declining exports and uncompetitive manufacturing. Speaking at a business seminar, Mr. Pichai highlighted that exports, which make up 70% of the economy, are suffering because the manufacturing sector is struggling to meet market demand.
“We can’t compete. We can’t adapt in time,” he stated.
Southeast Asia’s second-largest economy saw a 2.3% growth in the April-June quarter compared to the same period last year, an improvement from the 1.6% growth of the previous quarter. However, the quarter-on-quarter growth rate slowed to 0.8% in the second quarter, down from 1.2% in the preceding three months.
The Finance Ministry forecasts economic growth of 2.7% for 2024, an improvement from last year’s 1.9% growth, which lagged behind regional peers.
Later on Wednesday, the Bank of Thailand (BoT) is anticipated to maintain its key interest rate at a decade-high of 2.50% for the fifth consecutive meeting. However, uncertainty surrounding the government’s 145-billion-baht handout could introduce new pressure for potential rate cuts.
