2020.03.25 (nle2020.03) Thailand: Political and Economic Situation and Outlook Aki Fukuchi Senior Economist
[email protected] Economic Research Department Institute for International Monetary Affairs (IIMA) <Summary> 1. Restoration of civilian government was realized in Thailand for the first time in the past five years when a new government was launched in July 2019 with retired general Prayuth elected as prime minister following the 2019 general election held in March. However, Prayuth government has received a poor rating for its first half year’s policy management while its political base is not strong enough. On the other hand, it is not easy under the current election system for opposition groups to recapture the control of the government. Therefore it is highly likely that the policy management by the pro-junta administration will continue for the foreseeable time even though facing a risk of political instability. 2. The economy remains subdued. In 2019, in addition to continued slackness in exports, the decline of public investment and government expenditures due to delayed budget enactment for fiscal 2020 also weighed down the economy. While the accelerated implementation of the budget may contribute to boosting the growth rate, the future course of the economy needs to be carefully watched as the downward risks have risen on the economy both at home and abroad due to the spread of COVID 19 (novel coronavirus) infection along with the delay of large infrastructure projects based on the Eastern Economic Corridor (EEC) , a project for the economic development of Thailand Eastern Seaboard as well as effects of the droughts.