If household debt reaches 100 per cent of gross domestic product, it would be regarded as a crisis point for the country, he told a symposium on “Thailand, a New Decade of Economic Reforms under AEC Cooperation” organised by Bangkok Bank.
The government is shifting the country from relying on exports to riding domestic consumption because the global economy does not support exports. However, the government should not abandon exports, but should proceed in parallel with trends in international trade because some markets are still growing, he said.
The problem of the Thai economy right now is low private investment, Supachai said. Even though the government has attempted to build infrastructure to lure private investment and has also set up special economic zones, private investment is not likely to follow.
The government should find out why, so that it can offer supportive measures to private investors, while the private sector should outline the real reasons for lacking interest in investing in the country.
On the sidelines of the forum, he said investment flows into Thailand and elsewhere in Asean would be seen if the countries in the region could stabilise |their geopolitical situations.
The geopolitical issue is a serious factor disrupting Asean integration. Foreign investors are ready to pull out if they see such issues in those countries as posing a problem.
Even though Asean countries have melded themselves as the Asean Economic Community, some of them have also separately joined the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership. This does not comply with the objective of Asean integration, according to Supachai.
Geopolitical instability in Asean holds back its ability to drive the global economy, |even though it is the seventh-largest region of the world economy.
Asean should focus more on the establishment of a code of conduct for currency exchange in each country to prevent volatility, he said.
Supachai said Thailand must resign itself to economic gloom this quarter, but the government has time to develop economic growth.
Kobsak Pootrakool, vice minister of the Prime Minister’s Office, said the government had three more measures to stimulate the economy through to the first quarter of 2017. The measures involve the greying population, social enterprises and tourism.
The government believes these measures will help the economy to expand, as the economy might be sluggish because of internal factors.
The government has maintained its GDP growth forecast for this year at 3-3.5 per cent, but people are in mourning, and not in the mood for spending.
“It’s too early to say GDP in the fourth quarter will drop from the third quarter because we have to monitor the export situation,” Kobsak said.
“If exports are able to pick |up, it will help drive economic growth in the fourth quarter of this year.”