Thailand faces the challenge of an aging population.

According to the World Health Organization, Thailand is one of the countries with the fastest aging populations in the world. However, Thailand's economy does not seem to be prepared for this reality.

Between 2000 and 2020, the number of people aged 65 and over in Thailand doubled. As of 2020, approximately 13% of Thailand's population was aged 65 or older. Currently, Thailand has over 12 million people over 60, accounting for about 18% of the population.

Research by Kasikorn, a major bank in Thailand, estimates that by 2029, Thailand will become one of the "super-aging" countries, with more than 20% of its population over 65 years old.

Meanwhile, Thailand's economy is still lagging behind countries also facing aging populations, such as Japan and Germany. "We will get old before we get rich. We are not ready," commented Burin Adulwattana, chief economist at Kasikorn.

Low incomes, limited savings, and inadequate pension schemes mean that many people remain in poverty, while fewer people pay taxes and projected healthcare bills that are expected to triple will be a huge financial burden.

"It's really a ticking time bomb," said Kirida Bhaopichitr, an analyst at the Thailand Development Research Institute.

According to a Kasikorn survey, 34% of elderly Thais live below the poverty line, with living expenses of less than $830 per year. To live comfortably in Bangkok, a retiree needs at least $100,000 in savings. However, many Thais currently retire with less than $1,300.

Reports also indicate that the rapid aging of the population is having negative impacts on Thailand's workforce. Demographic changes could lead to a decline in Thailand's workforce at a rate of approximately 5% per year between 2020 and 2060, resulting in a total reduction of 14.4 million people. This will have numerous negative effects on the competitiveness and development of the Thai economy.

Furthermore, the increasing elderly population will put pressure on the Thai government 's pension and senior citizen benefit funds. Currently, the country has several types of pension funds for retirees, such as the Social Security Fund, the Government Pension Fund, and the National Savings Fund. Those who do not receive benefits from these funds receive money from the Thai government's senior citizen benefit program.

According to data from the Thai Fiscal Policy Office, in 2021, Thailand spent 750 billion baht (equivalent to 4.43% of GDP) on elderly care. In contrast, the amount spent on this in 2013 was only around 430 billion baht.

Demographic changes present significant challenges for policymakers, especially in the context of a pandemic that has caused immense hardship not only for the Thai economy but also for the lives of individual citizens.

Over the years, recognizing this trend, the Thai government has made efforts to research and adjust policies and implement various measures to adapt to the situation.

Thailand's new Prime Minister, Srettha Thavisin, has declared his intention to eradicate poverty by 2027 and "leave no one behind." During his election campaign, his party pledged an $8.1 billion welfare package for the elderly, but to date, the government has not announced any pension increase policies.

Meanwhile, last month, Thailand's Minister of Social Development, Warawut Silpa-archa, rejected calls to raise pensions to $81 per month, arguing that the government could not afford it.

In Thai culture, it's customary for children to care for their parents in old age. However, economist Burin emphasizes that this is unsustainable in the long run, as the economy faces a shrinking workforce, low growth, and low consumer spending.

Reportedly, Thailand is planning to raise the retirement age beyond the current 55-60 range.

Minh Hoa (compiled from Dan Tri and Nhan Dan newspapers)

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