Bangkok: The National Economic and Social Council (NESC) indicates that the Thai economy will be stuck in a structural quagmire by 2026, urging the government to accelerate reforms before facing a "lost decade."
According to Thai News Agency, Dr. Busayamas Jeamwijitkorn, Assistant Deputy Spokesperson of the Ruam Thai Sang Chart Party, commented on the impending challenges for the Thai economy. She highlighted that the economy is on the brink of a "chronic structural slowdown" due to deep-rooted issues that have been building over time.
Dr. Busayamas pointed out that five key mechanisms are malfunctioning within the Thai economy, beginning with declining productivity and competitiveness. The industrial sector remains entrenched in the old economy, heavily reliant on original equipment manufacturing (OEM) and labor. As the global economy shifts towards digital and innovative advancements, Thailand struggles to keep pace, exacerbating the situation with rising labor costs and an influx of low-cost goods via e-commerce, which hampers capacity utilization and stifles new private sector investment.
Dr. Busayamas further explained that the energy crisis in 2026 worsens these issues. As a net energy importer, fluctuations in global energy prices directly impact production costs and living expenses, leading to cost-push inflation. Despite weak purchasing power, goods prices remain high. The policy of subsidizing energy prices through the Oil Fund creates additional fiscal strain, limiting resources for long-term structural investments.
Household debt is another major concern, with levels reaching approximately 86-90% of GDP. This debt burden limits economic recovery as most income is diverted to debt repayment, diminishing purchasing power and reducing the effectiveness of government economic stimulus initiatives.
Demographic shifts towards a "highly aging society" also pose significant challenges. The decline in the working-age population threatens economic growth potential and tax revenue, while the government faces increased welfare and healthcare budgetary demands amid revenue constraints.
Moreover, Dr. Busayamas cited global geopolitical changes and new trade regulations, such as economic polarization and environmental measures like carbon taxes, as additional hurdles. Thailand's difficulties in attracting high-tech industries due to labor skill limitations and clean energy availability further complicate the economic landscape.
To address these challenges, Dr. Busayamas proposed urgent "structural reforms" in three main areas: transitioning industries towards a green economy and advanced technology, reforming the energy structure to lessen import dependency, and enhancing labor skills to meet modern demands. She stressed that without decisive action, Thailand risks a 'lost decade,' which would severely impact the country's competitiveness and long-term economic prospects.