Bangkok: In a world already grappling with multiple crises, ongoing tensions in the Middle East, particularly between Iran and Israel, are not just geopolitical concerns but are contributing to a "perfect storm" that severely destabilizes global economic stability. Associate Professor Dr. Danuwat Sakarik from the Faculty of Public Administration at the National Institute of Development Administration (NIDA) references a recent report from The International Monetary Fund (IMF) highlighting a significant rise in global public debt. The report predicts that by 2025, global public debt will reach 94% of GDP, potentially soaring to 100% by 2029, a level reminiscent of the post-World War II era. This development presents a formidable challenge for governments worldwide in terms of fiscal policy management.

According to Thai News Agency, Dr. Danuwat explains that wars, especially those affecting strategic energy hubs, lead to volatile and escalating oil and food prices, disrupting supply chains and triggering severe inflation. The most concerning issue is stagflation, a scenario characterized by high inflation coupled with low economic growth, posing a significant challenge to resolve. Additionally, increasing borrowing costs or interest rates further intensify the debt burdens on governments and households alike.

Dr. Danuwat advocates for "Targeted Policy" as a strategic choice amidst budget constraints. He suggests that instead of broad monetary stimulus policies, governments should implement targeted measures to assist vulnerable groups truly in need. The guiding principle should be "Value for Money," ensuring that every baht spent enhances investor confidence while maintaining fiscal discipline.

Focusing on Thailand, Dr. Danuwat notes that although the country's public debt remains within set limits, its fiscal space is constricting. Relying solely on short-term economic stimulus measures may not suffice due to Thailand's structural issues, including low growth and an aging population. Without improvements in productivity, Thailand's GDP may stagnate, risking further debt escalation.

For businesses and entrepreneurs, Dr. Danuwat emphasizes the necessity of adapting swiftly in what he terms "costly globalization." He advises increasing organizational productivity through AI and the digital economy to mitigate rising production costs. Accurate identification of industry trends, especially in the tourism sector, is crucial due to potential impacts from higher airfares and fewer flights. Moreover, businesses should consider global market dynamics as external fluctuations directly affect costs and purchasing power in Thailand.

In an era marked by uncertainty, maintaining a flexible mindset and efficiently managing limited resources are vital strategies for helping the Thai economy navigate the challenges posed by global debt and regional conflicts.