Thailand's economy slows down while Vietnam’s is revving up
The two countries now rank 7th and 10th in Asia in terms of GDP, but while Vietnam is experiencing rapid growth across all sectors, several reports highlight Thailand’s woes because of overreliance on existing strengths amid new challenges, experts say.
Bangkok (AsiaNews) – Thailand’s economy is slowing, showing weaknesses that were thought to have been overcome thanks to big investments and strong exports. At present, after the negative impact of the pandemic and overall global uncertainty, neighbouring Vietnam is set to overtake it.
The two economies rank 31st (7th in Asia) and 38th (10th in Asia) respectively in the world in terms of gross domestic product (GDP), this according to a recent study by the Chulalongkorn Business School and the World Economic Forum.
If until last year, the difference in GDP was still substantial (US$ 490 billion for Thailand and US$ 410 billion for Vietnam), Vietnam's rapid growth could, according to experts, make it the second-largest economy in Southeast Asia after Indonesia as early as 2028.
The limits of the Thai economy are also highlighted in the Future of Growth Report 2024, which clearly shows a setback in sustainable development, placing Thailand behind Japan, South Korea, Singapore, Malaysia, Vietnam, and Indonesia. However, with respect to innovation, its position is better.
Still, as the report indicates, Vietnam is rapidly gaining ground in all areas: innovation, infrastructure inclusiveness, sustainability, and resilience.
Thailand needs instead greater synergy between government, the public sector, and the business community to encourage sustainability, which is a leading economic factor in almost every country in the world.
For this to happen, a change of perspective and political direction is needed.
As economist Pipat Leungnamritchai points out, cited in The Nation, a Bangkok newspaper, the Thai economy continues to rely on its existing strengths, while facing new challenges and problems.
Low interest rates, fiscal stimuli, and an expanding tourist sector no longer seem as effective to support an economy that, looking to the future, also requires investment in innovation and workers’ training.
The country now faces several major challenges: a low birth rate and rapid ageing population with the consequent reduction of the workforce, low productivity due to a lack of innovation and competition, political instability, and the economic and power privileges granted to certain groups in society.
Under such circumstances, the risk is real that Thailand may lose its standing and status among Asia’s newly industrialising countries.
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19/08/2004
31/08/2021 14:37
