PM outlines economic plans after Moody’s cuts Thailand outlook

Prime Minister Paetongtarn Shinawatra delivered on Wednesday (April 30) a keynote address titled “Mission Thailand: Reviving the Economy.”

During her speech, she commented on Moody’s Investors Service’s recent decision to revise Thailand’s credit outlook from “Stable” to “Negative,” clarifying that this move does not constitute a downgrade in rating but rather reflects the agency’s assessment of reduced economic growth potential.

“This is not a rating or scoring downgrade,” the Prime Minister said. “It is Moody’s perspective that Thailand’s growth potential has weakened. A ‘Negative’ outlook does not mean the country has lost credibility. One key factor in Moody’s assessment is the global trend of rising tariffs, particularly those imposed by the United States, which have impacted many countries and caused similar outlook downgrades. The Ministry of Finance is closely monitoring the situation.”

She posed several key questions to emphasise the broader economic context: “Does Moody’s consider Thailand’s economy weak? How much growth potential do we have? How significantly are US tariffs disrupting our policies? And to what extent are political conflicts becoming obstacles to policy implementation and economic progress?”

Despite these concerns, she acknowledged the importance of reassuring international observers. “The first thing Thailand must do is avoid causing further concern. We must prepare our economy to weather the storm and minimise the impact of trade barriers,” she said.

At the same time, she emphasised the need to focus on long-term solutions, including generating real revenue through investment in future industries, particularly data centres and semiconductors. “These investments are critical to driving and sustaining economic growth.”

She underlined the importance of achieving consistent GDP growth. “We must ensure steady growth of 3–4% year after year, not fluctuating figures. Sustainable growth must be our goal,” she said. “To achieve this, we must develop new industries and promote investment. When new investments are encouraged, foreign companies will register, capital will flow in, and more investors will follow. The government has already been working extensively on this since last year.”

She further noted that the public sector must also accelerate investment. “In 2024, we are seeing the highest public investment in a decade, 72% of which is government-driven. This is aimed at boosting employment, and we are already seeing results across ministries, starting earlier this year.”

In addition, the Prime Minister emphasised the need to enhance research and education, particularly in improving existing products across the fisheries, industrial, and agricultural sectors. “Everything must be supported through greater investment in research,” she said. “Lastly, we must focus on developing human capital—our most important resource.”

Reflecting on Thailand’s economic performance, she acknowledged that GDP growth was slow in 2024, at 2.5% for the year. However, growth accelerated to 3.2% in the final quarter, which she cited as a sign that stimulus policies are yielding results despite challenges such as earthquakes and tariff barriers.

The government, she noted, continues to seek solutions through dialogue with all sectors—public, private, and civil society. “We recognise that the government may not always have all the answers, but we can support the private sector in working alongside us,” she said.

Using trade tariffs as an example, she questioned what types of Thai businesses are investing in the US and what forms of support the government could provide. “So far, we have not had clear policies to help Thai investors expand abroad. We must now place greater focus on this issue in order to build investor confidence.”