Which direction will Thailand's economy head after the 8 February election, with the Bhumjaithai Party leading the government under the global economic context where U.S. President Donald Trump is stirring turmoil in the Middle East? This question framed the discussion in the forum "Economists' Perspectives on Government Policy Directions for the Next Four Years," organized by the Economics Association of Thailand.
Dr. Kobsak Pootrakul, President of the Economics Association of Thailand and Chairman of the Thai Capital Market Council (FETCO), opened the session candidly, noting that on the morning of 4 March, South Korea’s stock market triggered a circuit breaker with an 8–9% plunge, while Thailand’s stock index fell 66 points in the morning session alone, with potential for further decline. More concerning, however, is the fundamentally radical shift occurring in the world’s structure.
He explained that the current volatility is only the “first rehearsal” of four waves impacting Thailand sequentially: capital markets, the real economy, production base relocation, and the U.S. dollar. Last year was the first round of trade wars; this year marks the second round, with new hotspots emerging almost monthly.
The most pressing issue, from his viewpoint, is the question Thailand will soon face: “Which side will you choose, America or China?” A wrong answer could lead to severe trade measures, as Spain and the European Union are currently experiencing.
Dr. Kobsak proposed three urgent measures:
Dr. Kiattipong Ariyapruchya, Senior Economist for Thailand at the World Bank, described Thailand’s economy as internally conflicted. He noted that global economic figures for 2025–2027 remain largely unchanged, but beneath the surface, large waves are hidden. The world’s resilience stems from frontloading exports to avoid tariffs and AI-driven investment boosting developed economies.
For Thailand, the World Bank clearly identifies it as the "slowest growing country in ASEAN," facing three main structural problems:
However, there are real opportunities, especially with increased Chinese investment in electric vehicles, air conditioners, and solar panels industries in Thailand.
The World Bank highlights five sectors with potential in Thailand: Advanced Manufacturing, Creative Economy, Sustainable Tourism, Health Tourism, and Agribusiness. It also recommends three success conditions: open competition, workforce skill development, and fiscal balance.
Banyong Pongpanich, Chairman of Kiatnakin Phatra Bank Public Company Limited, stated that Thailand’s economy has no quick wins. He pointed out that Thailand’s economic growth rate has steadily declined every decade—from 7.5% before the 1997 Asian financial crisis, to 5% after that crisis, down to 3% after the 2008 global financial crisis, and now below 2%.
Analyzing eight institutional indices, Thailand ranks outside the top 40 in all categories, with most worsening over the past decade. Democracy ranking fell from 80th to 130th; anti-corruption from 75th to 118th; rule of law from 50th to 80th. This aligns with Nobel laureate Professor Daron Acemoglu’s research that institutional factors are key to economic development.
The good news is that all these indices can be improved. Thailand has already taken a clear “first step” by applying for OECD membership, which will pressure and support raising institutional standards across all areas. Additionally, with 56 state enterprises holding assets totaling 20 trillion baht as the largest “drag,” transparency according to OECD standards could kickstart genuine reform.
Associate Professor Dr. Nipon Puapongsakorn, former president of the Economics Association of Thailand, began by saying that the Thai government has never lacked agricultural policies, yet results never improve. The answer is that policies reflect political voices rather than economic realities. The largest budget item, over 100 billion baht annually, addresses falling crop prices, aimed at pleasing voters rather than tackling root causes.
The main problem is low productivity. Net profit from offseason rice farming averages less than 2,000 baht per rai. A farmer with 20 rai (average landholding) earns less than 80,000 baht per year. Agricultural research funding, once 1% of the agricultural GDP, has dropped to under 0.2%, leading central region farmers to switch to higher-yielding Vietnamese rice varieties instead.
Dr. Nipon proposed three game-changing strategies:
Dr. Nada Wasi, Research Director at the Puey Ungphakorn Institute for Economic Research, opened with five worrying facts. First, Thai life expectancy has risen to 78 years, but retirement age remains at 60 and social security pension age at 55 since 1991, while many countries have moved these ages to 62–67 years.
Second, shockingly, labor market opportunities in Thailand decline gradually from ages 35–40, not at 60. Over 60% of online job postings set maximum age limits of 30–35 years, a practice illegal in many developed countries.
Regarding the social security old-age fund, Dr. Nada noted that contribution rates at 7% versus pension payouts reaching 20% of salary have caused an inherent imbalance. Without changes, the fund will near zero within 20–30 years.
Her proposals emphasize a systemic view rather than fixing individual funds, recommending (1) laws banning age limits below 55 for applicants, (2) pension and contribution adjustments for balance with gradual increases in full pension age for future generations, and (3) designing an integrated income system for seniors centered on the elderly, not the system.
However, all five voices on the panel reflected a shared reality: Thailand is steering a “small boat” through a storm bigger than ever, facing trade wars, global power shifts, household debt, outdated industries, increasingly impoverished farmers, and the ticking bomb of an aging society. Crucially, there are no shortcuts or quick wins; short-term fixes that ignore institutional roots will leave Thailand as a fragile wooden boat adrift in a volatile ocean.
The panel’s recommendation is to have the courage to decide, to reform boldly, and to accept short-term pain in exchange for a sustainable future.