WB sees Thai fiscal risks mounting due to spending surge
Pro-growth consumption-stimulating measures such as the digital wallet have added to fiscal pressures in Thailand, the World Bank said.
Thai Prime Minister Paetongtarn Shinawatra luanches the second phase of the digital wallet scheme on Jan 27, 2025, at Government House. The World Bank warns the policy has added to fiscal pressures. (Photo: static.bangkokpost.com)
Bangkok (VNA) - Thailand’s pursuit of an expansionary fiscal policy strategy to propel growth faces the risk of rising costs for elderly care, investment and the need to keep public debt level to sustainable levels, according to the World Bank (WB).
The Southeast Asian nation can enhance fiscal resilience amid the rising spending by reducing regressive energy subsidies, raising tax revenue and accelerating public investments in infrastructure, new technology and human capital, the bank said in its Thailand Economic Monitor report released on February 14.
“Pro-growth consumption-stimulating measures such as the digital wallet have added to fiscal pressures,” the report said, referring to Prime Minister Paetongtarn Shinawatra administration’s ambitious cash handout programme to stimulate the economy.
Thailand’s economy has lagged the pace of expansion of its neighbours — growing at an average of less than 2% in the past decade — hobbled by the surge in household debt and a manufacturing sector hurting from cheap imports from China. The government has unveiled bigger budget spending, cash handouts and debt-relief measures to bolster growth amid heightened uncertainties following US President Donald Trump’s threat to impose reciprocal trade tariffs.
The economic recovery is set to gain further momentum this year, driven by stronger domestic demand and fiscal stimulus, while external factors will slow slightly, the World Bank said.
Thailand’s growth is projected to accelerate to 2.9% this year, up from 2.6% last year. In 2026, growth is projected to slow to 2.7%, and the output level is expected to reach its potential level by 2028.
With the pressure for higher social spending and public investments in human capital due to aging increasing, the public debt as a ratio of gross domestic product set to swell to the ceiling of 70% in five years from an estimated 64.8% at the end of the current fiscal year, the World Bank said.
While a cautiously accommodative monetary stance of the Bank of Thailand is appropriate to support the recovery, providing targeted household debt relief while minimising credit tightening and maintaining financial stability remains a priority, the report said.
The Thai bank, which kept the policy rate steady at 2.25% in December after a surprise quarter-point cut in October, is scheduled to review the rate on February 26./.
The World Bank (WB) expected Thailand's economy to grow 3.6% year on year in 2023, accelerating from 2.6% in 2022, supported by domestic consumption, tourism recovery and pent-up demand in China.
The World Bank has said digital and disruptive technologies, along with the development of a circular economy, can earn Thailand up to 3.4 billion USD each year in additional investments, savings and revenue.
Thailand's central bank (BoT) has pledged to maintain a strong monetary policy framework amid rising global uncertainty, particularly as new policies are expected to be introduced in the US.
Malaysia, as ASEAN 2025 Chair, marked the bloc’s 58th founding anniversary on August 8 with a vibrant celebration in Cyberjaya, blending an official ceremony with a colorful cultural festival.
Vietnam plays an important role in Southeast Asia’s economic growth and is a key partner of her country in realising the shared vision of a peaceful, stable, and prosperous region, said Robyn Mudie, First Assistant Secretary of Office of Southeast Asia (OSA) – Southeast Asia Regional and Mainland Division at Australia’s Department of Foreign Affairs and Trade (DFAT).
The 2025 ASEAN Business Community Development (ABCD) Forum, themed “Empowering ASEAN's Next Leap: Digital, Sustainable & Entrepreneurial Transformation” brought together ministers, CEOs, and top industry experts to discuss key regional economic priorities.
The DES Ministry will seek cooperation from social media platforms to prevent the spread of fake news and monitor accounts related to such activities, he told reporters after chairing a meeting of the newly established Anti-Fake News Centre (AFNC).
The Joint Standing Committee on Commerce, Industry and Banking identified the US tariff reduction as a significant driver behind the improved economic outlook for Thailand.
Financial institutions and financial technology (fintech) players are intensifying their focus on expanding across the Association of Southeast Asian Nations (ASEAN), adopting tailored strategies to strengthen their presence in the region’s digital financial services landscape.
Featuring a permanent exhibition area, the ASEAN Hall will function both as a cultural showcase and as a dynamic venue for ASEAN-related events and programmes. Its inauguration on ASEAN Day added symbolic weight, marking a fresh milestone in ASEAN–RoK relations.
Thailand’s Ministry of Commerce and rice exporters are devising strategic plans to boost rice exports amid global market fluctuations, focusing on key markets and adjusting output.
The focus of the upcoming ASEAN Summit in October will be on strengthening economic relations through intra-regional trade and investment, as well as regional initiatives on energy networks and connectivity.
Indonesian Ambassador Rina P. Soemarno, who currently serves as Chair of the ASEAN Committee in Prague, emphasised the spirit of regional solidarity and cooperation, and the importance of enhancing ASEAN–Czech Republic relations.
The Indonesian Government is determined to seize opportunities to enhance the competitiveness of national agricultural products, an official has said, adding that it always strives to promote exports at the highest possible level, based on a mutually beneficial foundation.
Finance Minister Pichai Chunhavajira has outlined a six-point strategy to promote innovation, support small and medium-sized enterprises (SMEs), and push for Thailand's removal from the US Trade Representative (USTR)’s special 301 Watch List regarding intellectual property rights protection among trading partners.
Vietnamese Ambassador to Israel Ly Duc Trung emphasised ASEAN’s central role in regional mechanisms such as the ASEAN Regional Forum (ARF) and the East Asia Summit (EAS), highlighting its significant contribution to promoting peace, stability, and prosperity in Southeast Asia.
The consumer index of the University of the Thai Chamber of Commerce (UTCC), fell to 51.7 in July from 52.7 in the previous month. The sluggish economy and the trade war, as well as high living costs, continue to undermine confidence, the university said.
Deputy Speaker of the Hungarian National Assembly Istvan Jakab expressed his hope for further deepening Hungary’s ties with ASEAN countries and called for their support for Hungary’s accession to the Treaty of Amity and Cooperation in Southeast Asia.
The 30-storey tower crumbled seconds after a 7.7-magnitude earthquake hit neighbouring Myanmar on March 28. The partially built high-rise, meant to house the State Audit Office (SAO), was the only building in Thailand to collapse, killing 89 people on the site, mostly construction workers.
Indonesia’s waste generation is projected to exceed 50 million tonnes in 2025. Of the total, more than 20 million tonnes could potentially enter the ocean through rivers, coastal areas, small islands, ports, and marine activities, and thereby, pose a risk to coastal ecosystems and marine biota.
Indonesia is accelerating plans to increase lithium imports, particularly from Australia, in a bid to fill gaps in the electric vehicle (EV) battery supply chain and realise its ambition of becoming a global EV manufacturing hub.
Malaysia’s gross expenditure on R&D (GERD) reached 1.01% of gross domestic product in 2022, a notable increase, with more than 51% contributed by the industry sector. The country is targeting GERD to reach 2.5% by 2030, in line with the national goal of transforming into a high-technology nation.
