PM pushing for reforms to boost ease of doing business
Prime Minister Prayut Chan-o-cha laced into his economic ministers last week after Thailand slipped slightly in annual global rankings for ease of doing business. The Prime Minister demanded his ministers accelerate measures recently unveiled by his deputy prime minister overseeing the economy to support and streamline procedures and approvals for those doing business in the Kingdom.
Despite the fall in rankings, the Thai economy grew 2.9 percent in the third quarter compared with the same period last year, according to statistics released Monday by the National Social and Economic Development Board. That was better than the 2.5 percent median forecast in a Bloomberg survey of economic analysts. The Board credited the government’s stimulus programs devised by Deputy Prime Minister Somkid Jatusripitak, who oversees the economy, for the improved performance.
Also last week, a survey showed consumer confidence among Thais has begun to rise. Improving consumer confidence is an indicator that foreshadows greater willingness to spend by consumers. More robust consumption could serve as an important driver of the Thai economy at a time when exports have been tepid because of weak demand in key overseas markets.
A statement by the University of the Thai Chamber of Commerce, which conducts the consumer confidence surveys, also attributed the improved sentiment to the government’s stimulus programs. The rise to 73.4 points in October from 72.1 points in September was the first upward movement in the consumer confidence index in 10 months.
“With better confidence, consumers feel optimistic about spending their money on durable goods and travel, particularly for purchasing a new house following the government’s measure to lower the housing transfer tax and mortgage tax,” said Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Center.
“Consumers will also decide to purchase more new cars in the final quarter of this year, as the excise tax for some vehicles will be increased next year,” he said.
He cautioned, however, that consumer confidence is still fragile. Should the government’s stimulus programs continue to bring positive results, confidence should continue to improve. He added that he believed the Thai economy had already bottomed out and slow but steady growth would increase from this point forward.
Increasing growth is a top priority for Prime Minister Prayut, who chaired a meeting of economic ministers last week. The Kingdom’s ranking in the World Bank’s “Doing Business” report for 2016 slipped from 46th place in 2015 to 49th among the 189 economies covered.
“The prime minister chaired the meeting today because he sees the increase in the ease of doing business, or the eradication of business and investment barriers, as one of the most important aspects that will increase investments in Thailand,” said Deputy Prime Minister Somkid.
He attributed the lower ranking to complacency and that too many government agencies don’t communicate well with the international community. He insisted many of the problems would be easy to fix and that the government will make every effort to do so.