Thailand's economy is showing positive signs, but new Prime Minister Shinawatra still faces a host of challenges.

Thailand is striving to revive its economy , amid rising operating costs that are causing difficulties for small and medium-sized enterprises.

Thailand's new Prime Minister , Paetongtarn Shinawatra. (Source: Bangkok Post).

The Federation of Thai Industries (FTI) announced that the Thai Industrial Sentiment Index (TISI) rose for the first time in four months to 89.3 points in July 2024, driven by increased demand for food, medicine, and cosmetics.

This improvement comes after the TISI index in June 2024 was at 87.2 points, the lowest level in 24 months.

According to FTI President Kriengkrai Thiennukul, with more orders for food, medicine, and cosmetics, coupled with the government's accelerated budget disbursement, many businesses seem more confident. Increased budget spending, particularly on state infrastructure development projects, has injected capital into the economy, significantly benefiting the construction sector.

Mr. Kriengkrai added that the number of applications for state investment incentives increased by 35% year-on-year, reaching over 458 billion baht (US$13.22 billion). All these factors contributed to the higher TISI index in July 2024, but this does not mean that businesses can be complacent about the country's economic situation.

Thailand is still struggling with high levels of household debt, leading banks to tighten criteria for auto loans, impacting the automotive industry.

According to FTI, domestic car sales in the first half of this year decreased by 24.1% compared to the same period last year. The country's household debt-to-GDP ratio is currently 91%.

The TISI data for July 2024 is based on a survey of 1,323 businesses across 46 sectors under the FTI. According to the survey, the global economy topped the list of concerns for businesses with 66.8%, followed by domestic political situations (58.7%) and exchange rate fluctuations (37.9%).

The survey was conducted ahead of the August 14 ruling by the Thai Constitutional Court removing Prime Minister Srettha Thavisin from office for violating ethical standards.

On August 16, the Thai House of Representatives voted to elect Paetongtarn Shinawatra (the youngest daughter of former Prime Minister Thaksin Shinawatra) as prime minister, replacing her predecessor Srettha Thavisin. Paetongtarn became the youngest prime minister in Thai history, and one of the biggest challenges she faces is reviving the country's economy.

Economist Vorapol Sokatiyanurak, former secretary of the Thai Securities and Exchange Commission, highly regards the 37-year-old new prime minister. However, he believes that Paetongtarn will face significant challenges, particularly regarding economic issues and job creation.

"Prime Minister Paetongtarn will have to address the declining competitiveness. The shortage of high-quality human resources, especially in science and technology, is hindering Thailand from producing the goods that the modern world demands," Vorapol commented.

On the other hand, according to Mr. Vorapol, household debt is another pressing issue that the new prime minister must address. Household debt in Thailand currently exceeds 16.3 billion baht.

Ms. Paetongtarn comes from the private sector. Her company operates in the real estate, hotel, and tourism industries. The stock market reacted positively immediately upon news of her election as Thailand's 31st Prime Minister. Investors hoped that many current economic policies would be continued.

Source: https://baoquocte.vn/kinh-te-thai-lan-phat-di-tin-hieu-tich-cuc-tan-thu-tuong-shinawatra-van-doi-mat-hang-loat-thach-thuc-282921.html