Economy
Bank of Thailand Reports Decline in Economic Growth Potential
The Bank of Thailand warns that the nation's economic growth potential has dropped to 2.7%, citing structural challenges and a prolonged slump in the SME sector.
According to a report from Khaosod Online, Don Nakornthab, Assistant Governor of the Bank of Thailand (BOT), has highlighted significant structural challenges hindering the nation's economic performance. The BOT estimates that Thailand's economic growth potential has declined to 2.7%, down from 3.5% following the global financial crisis and significantly lower than the 5% growth seen between 2003 and 2007.
Projections indicate growth of 2.3% for 2026 and 1.8% for 2027. The BOT identifies three primary factors for this slowdown: a shrinking workforce due to an aging society, declining investment levels, and slow growth in productivity and technological adoption. Furthermore, the SME sector has reportedly faced a downturn for 16 consecutive quarters.
For residents and travelers, these figures suggest a period of economic stagnation that may impact local business environments and service sectors. The BOT emphasizes that achieving growth above 3% would require investment levels reaching 30% of GDP. While these projections provide a sobering outlook on the country's structural health, it remains to be seen what specific policy measures the government will implement to address these long-term productivity and investment gaps. The BOT has cautioned that monetary policy alone is insufficient to resolve these deep-seated economic issues.
