Sethaput Suthiwartnarueput: The Thai economy - the current state and the way forward

Speech by Dr Sethaput Suthiwartnarueput, Governor of the Bank of Thailand, at the Japanese Chamber of Commerce (JCC) Seminar, Bangkok, 29 March 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Mr. Shoichi Ogiwara, President of the Japanese Chamber of Commerce,
JCC Board of Directors,
JCC members,
Distinguished guests,

It is a great pleasure and honor for me to be here this evening. I would like to speak on three topics today. The first topic is to discuss where we are today in the Thai economy. The second topic will be about where we are heading next and what to expect in terms of the economic outlook. Finally, I will conclude with the discussion of why I think, despite all of our problems, Thailand is still a good place to do business

 I would like to start by sharing some thoughts on where we are in terms of the Thai economy. The short answer is the economy is recovering but slowly. When we were hit by the COVID-19 shock last year, we experienced a GDP contraction of about 6 percent. This year, we expect to register a GDP growth of about 3 percent.Therefore, even by the end of this year, our economy will still not be back to the pre-COVID-19 level. Why has the recovery been slow and perhaps even slower than other countries in the region. There are a couple of reasons I would like to share with you. 

The first is, the COVID-19 shock hits the Thai economy at particularly where we are vulnerable. If we look back at the previous crises which the world economy faced – for example, the 2008 global financial crisis – Thailand got hit very little. We went through that crisis relatively quite well. However, due to the nature of this crisis, COVID-19 hits us exactly where we are vulnerable. This is because we are an economy which highly depends on tourism where the share of services to GDP is very high. Therefore, this makes our recovery much slower than other countries in the region.