Bangkok: Woraphat revealed the details of his discussions with the Thai Bankers’ Association, hoping to leverage key mechanisms to revive the economy following an average GDP growth of 2.1% over the next five years, the lowest in ASEAN. He emphasized that “it’s not a done deal,” and emphasized the need to allocate 1.7 trillion baht annually to procurement as a lever to support SMEs.
According to Thai News Agency, Deputy Finance Minister Woraphak Thanyawong revealed the details of Prime Minister Anutin Charnvirakul and his economic cabinet’s first visit to the Thai Bankers’ Association in 58 years. The association is considered a key economic pillar, as the banker visited and spoke with customers on the ground, discussing their businesses, livelihoods, and business trends across nearly every sector. The bank effectively reflects the reality of the Thai economy. Prime Minister Anutin and Deputy Prime Minister Ekniti know nearly every CEO of a Thai bank, and the exchange of views was a fruitful experience. Key points from the Thai Bankers’ Association are summarized below.
The Thai Bankers Association’s economic outlook shows Thailand facing multiple problems colliding head-on. This stems from a fragile existing structure, with the informal economy accounting for 48% of GDP, exceeding that of many Asian countries. This has led to incomplete tax collection, high inequality, and the baht being manipulated by gold and crypto transactions. Household debt has soared to over 100% of GDP, both within and outside the system.
Thailand’s declining competitiveness is like a “jammed engine.” GDP growth is expected to average only 2.1% over the next five years, the lowest in ASEAN. Meanwhile, FDI inflows are low, leading Thai capital to flow out to invest abroad instead. Government agencies face similar challenges. Over 100,000 laws and regulations are becoming a burden for businesses, forcing them to bear high hidden costs. Government agency data is so incoherent that “the cause of the baht’s appreciation cannot be determined,” while public debt continues to rise.
The Thai Bankers’ Association proposed the “Reinvent Thailand” platform as a forum for public-private-financial cooperation. The approach is data-driven, with a clear host, KPIs for measurement, and the right incentives to drive the movement forward in all areas.
The association recommends three key approaches for the public sector: establishing a JV-AMC between commercial banks and specialized financial institutions to acquire and remanage non-performing loans; requiring all lenders to report credit information to the National Credit Bureau (NCB) and creating a National Credit Score (NSC) so that everyone is assessed against a single standard for risk.
For the business sector, the “Greenly Made by Thais” initiative should be promoted to enhance Thai exports’ ESG competitiveness and the use of domestic raw materials. Measures like “Big Brother Helps Little Brother” should be implemented to allow large companies to support SMEs. New tools such as digital lending platforms and PromptBiz should be implemented to reduce business costs.
Regarding government operations, it is proposed that a 1.7 trillion baht annual procurement budget be used as a lever to support SMEs and GMBT products. Regulatory restructuring will reduce procedures and redundancy. The government will undertake a 4+4 urgent policy initiative. The association has summarized these into four main issues and four additional measures.
The Thai Bankers’ Association warns that the Thai economy is facing risks from all sides. If the government takes concrete action according to these guidelines, Thailand still has a chance to create a new round of growth and escape the middle-income trap. Some recommendations include resolving household debt, enhancing SME liquidity, stimulating the economy with short-term but long-term benefits, and attracting long-term investment in targeted industries from abroad.