Finance Ministry targets 3% growth as Moody's stabilizes outlook

Prachachat•Economy•13h ago

Reader Briefing

The Ministry of Finance aims to increase total national investment to 30% of GDP to push economic growth above 3%, while Moody's Ratings has restored Thailand's credit outlook to Stable.

•The Thai government targets increasing total investment from 23-24% to 30% of GDP.
•Moody's Ratings adjusted Thailand's credit outlook from Negative back to Stable at Baa1.
•Private sector investment grew by 13% in the second quarter, the highest in 13 years.
•Moody's Ratings assesses Thailand's potential growth at only 2.5%.

Overview

•The Ministry of Finance is implementing three pillars consisting of growth, efficiency, and discipline to unlock regulations and attract private sector and FDI investment in new industries.
•The Thai government targets increasing total national investment from the current 23-24% to 30% of GDP to support sustainable economic growth of 3% or higher.
•Dr. Santitarn Sathirathai stated that an aging society suppresses economic growth by approximately 1% per year because over 70% of the budget is spent on recurring expenses.
•Private sector investment in the second quarter expanded by 13%, marking the highest growth in 13 years.
•Moody's Ratings has adjusted Thailand's credit outlook from Negative back to Stable at the Baa1 level.
•Moody's Ratings noted Thailand's public debt increased from approximately 35% before COVID to around 60% of GDP currently.
•Moody's Ratings identifies an aging society, labor skill issues, and low investment levels as major challenges for Thailand's credit.
•Future credit rating upgrades depend on Thailand's ability to control public debt, reduce the debt-to-GDP ratio, and increase the efficiency of government investment and budget disbursement.

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Key Entities

Organization

Ministry of Finance(กระทรวงการคลัง)ℹ️

The government body implementing three pillars of growth, efficiency, and discipline to increase economic potential.

Moody's Ratings(มูดี้ส์)ℹ️

A credit rating agency that adjusted Thailand's outlook to Stable at Baa1.

Person

Dr. Santitarn Sathirathai(ดร.สันติธาร เสถียรไทย)

Assistant Minister to the Minister of Finance.

Mr. Gene Fang(Mr.Gene Fang)

Associate Managing Director of Moody's Ratings.