Thailand Faces Investment Crisis as Finance Minister Calls for Economic Overhaul

 

Thailand's Finance Minister Pichai Chunhavajira delivered a keynote address at the opening of the 'Thailand Investment Forum 2025 : Great Depression' on Saturday, outlining the government's fiscal measures to revive the economy, boost investor confidence, and reinvigorate the Thai capital market.

 

The forum, hosted by Krunthep Turakij, Thansettakij, and Post Today, provided a platform for Minister Pichai to present his vision under the theme "Driving Thailand: Fiscal measures to revive the economy, boost confidence, and revive the Thai capital market."

 

 

Clear Strategy Essential for Investor Confidence

Minister Pichai emphasised the critical importance of establishing clear national strategies and direction to instil confidence amongst investors.

 

He stressed that any measures introduced must have transparent objectives aimed at genuinely stimulating economic advancement and sustainable growth.

 

The Finance Minister highlighted the government's role in building investor confidence, which he identified as fundamental to increasing investment levels and driving Thailand's economic engine forward.

 

 

 

Investment: The Heart of Economic Growth

Drawing upon historical data, Minister Pichai illustrated the direct correlation between investment levels and economic growth.

 

He referenced periods when Thailand's economy experienced robust growth, noting that strong economic performance—such as GDP growth reaching 10% or similar levels—typically coincided with investment-to-GDP ratios of 40-50%.
 

 

 

These historical examples demonstrate how substantial investment, whether from the private or public sector, creates a positive cycle leading to increased employment, consumption, and subsequent GDP growth.

 

However, the current situation presents a stark contrast. The Finance Minister revealed that Thailand's current investment-to-GDP ratio has declined to approximately 6%—significantly lower than historical levels and well below the global standard of 30-40%. This dramatic reduction in investment directly impacts the economy's overall growth potential.

 

 

Addressing Investment Challenges

Minister Pichai acknowledged that Thailand's declining investment levels represent a long-standing, systemic issue rather than a temporary setback.

 

He outlined several key areas requiring urgent government intervention to create a more conducive investment environment:

The government must review and modernise outdated legislation that hampers investment, streamlining procedures and facilitating processes for both domestic and foreign investors. 

 

Public sector investment in essential infrastructure, including transport systems, energy networks, and digital connectivity, is crucial to support new investments and enhance the country's competitive capabilities.

 

Investment should focus on sectors with strong potential that align with national development goals, such as advanced technology industries, agricultural processing, and tourism, to create added value and distribute income more effectively.

 

 

Additionally, transparency and anti-corruption measures represent significant barriers that undermine investor confidence, requiring decisive government action to establish transparency and fairness in business operations.

 

 

 

 

Government's Role in Building Confidence

The Finance Minister emphasised the government's multifaceted role in fostering investor confidence through several key areas. Government policies must be clear and consistent, enabling investors to make long-term investment plans with confidence.

 

Laws must be enforced rigorously and fairly to create equality and reduce investment risks, whilst the government must be prepared to address emerging issues swiftly and effectively to prevent them from eroding investor confidence.

 

Attracting foreign direct investment remains essential for bringing technology, knowledge, and capital into the country. Furthermore, maintaining fiscal discipline, controlling inflation, and managing public debt efficiently are necessary for establishing economic security.

 

 

Collaboration: The Key to Success

Minister Pichai concluded by emphasising that driving economic growth and building investor confidence is not solely the government's responsibility. Success requires collaboration across all sectors, including private enterprise, investors, and the general public.

 

He stressed that close cooperation amongst all stakeholders will enable Thailand to overcome current challenges and ultimately achieve sustainable growth objectives.