15-07-2025
Bankers' association pushes formal economy to the fore
The use of public policy to support the economy should primarily focus on the formal economy and Thai labour, according to Payong Srivanich, chairman of the Thai Bankers' Association (TBA).
Speaking at the iBusiness Forum seminar hosted on Tuesday by the Manager Group, Mr Payong said this approach would help drive economic mechanisms and boost Thai people's income over the next 5-7 years.
Last week, the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) held discussions with the Bank of Thailand (BoT) on economic support through public policy, as heightened uncertainties -- particularly due to the US tariffs -- are expected to impact both business and household sectors in various ways.
The private sector council proposed that the use of public policy to support the economy should primarily focus on the formal economy and Thai labour. Typically the formal economy covers both taxpayers and non-taxpayers.
According to Mr Payong, the current economic situation, impacted by US tariffs, presents an opportunity for both the public and private sectors to initiate meaningful reforms in economic and business practices.
During global crises in the past, many countries leveraged the situation to reform their economies and enhance their post-crisis potential.
For instance, during the global financial crisis of 2008 and 2009, global GDP growth fell sharply -- dropping to 2.1% in 2008 and contracting by 1.3% in 2009 -- down from growth rates of 4.5% in 2006 and 4.4% in 2007.
In the aftermath, global GDP rebounded, reaching 4.5% in 2010 and 3.3% in 2011.
Similarly, during the Covid-19 pandemic in 2020, global GDP contracted by 2.9%. In response, many countries, including Southeast Asian nations, undertook significant economic reforms, leading to improved growth potential post-pandemic.
"Thailand, however, has not yet capitalised on such crises as opportunities for meaningful economic reform. Now is an opportune moment to implement reforms in preparation for future recovery," Mr Payong said.
He noted that reforms should focus on Thailand's export and manufacturing sectors, both of which are vulnerable to US tariffs, as well as long-standing structural issues.
Technological development is another critical area, which is essential for improving national productivity and upskilling the Thai workforce.
In 2024, Thailand ranked 39th globally in digital and technological skills, trailing Singapore (2nd), Indonesia (20th) and Malaysia (36th). ChatGPT adoption per internet user in Thailand stands at 6%, compared to 17% in the Philippines, 14% in Malaysia, 9% in Vietnam and 7% in Indonesia.
Mr Payong also stressed the need for increased investment in research and development (R&D) to boost productivity and GDP per capita. Currently, Thailand's R&D investment is less than 20% of GDP, he noted.
