At Fitch Ratings’ annual conference on Thailand held today, analysts highlighted ongoing challenges for the Thai economy, including sluggish GDP growth compared to its regional peers and deteriorating public finances, even as the nation maintains robust external financial standing.
The conference kicked off with insightful remarks from Dr. Paopoom Rojanasakul, Thailand’s Deputy Minister of Finance, who outlined the nation’s economic conditions and planned reforms. Following him, Mr. Songpol Chevapanyaroj, Secretary-General of the Government Pension Fund, discussed asset allocation and investment challenges in the present economic scenario.
A key presentation by Mr. Thomas Rookmaaker, Senior Director at Fitch Ratings for Sovereigns-APAC, focused on persistent global risks and their impacts on Asian economies. He projected a modest deceleration in global growth to 2.5% in 2025, down from 2.7% in 2024, and highlighted central banks’ potential policy responses due to gradually increasing unemployment in developed countries. Mr. Rookmaaker also underscored the potential threats from geopolitical tensions and rising protectionism, considering their critical influence on the export-driven growth in Asia.
In discussions about fiscal strategies, Mr. Rookmaaker mentioned the comparatively slow pace of fiscal consolidation within the Asia-Pacific region. Specifically for Thailand, he noted that the government’s debt-to-GDP ratio has significantly escalated since 2019. Despite these fiscal headwinds, Thailand’s cost-effective deficit financing and strong external finances were identified as significant advantages.
Mr. Parson Singha, Senior Director for Financial Institutions at Fitch Ratings, closed the session with an analysis on the banking sector across Asia. He observed varied trends across different markets within the region, with more positive developments expected in emerging markets such as Indonesia and the Philippines. Although Thai banks have seen a substantial recovery post-pandemic, they face ongoing asset quality issues and strategic challenges related to growth and competition.
The Fitch conference effectively shed light on the intricacies of Thailand’s economic landscape and the broader financial dynamics at play within Asia, providing valuable insights into both immediate challenges and longer-term economic prospects.
