Thai Prime Minister's Optimistic Policies Pose Fiscal Risks
After the August 2019 elections, Thailand has a new Prime Minister, Prayut Chan-o-cha, who has caused a stir of optimism with his election.
After the August 2019 elections, Thailand has a new Prime Minister, Prayut Chan-o-cha, who has caused a stir of optimism with his election. His popularity amongst the citizens has grown substantially since he became Prime Minister, who promised to make changes towards the kingdom‘s stability. However, some of his more populist policies have raised some eyebrows in the fiscal field.
The Thai government has devised plans to raise the minimum wage and to reduce income taxes. While these initiatives are sure to benefit the citizens of Thailand, economists have raised concerns about the potential rippling effect these fiscal policies can have. Although seen as positive steps, some experts worry that these policies may have a direct impact on the public debt.
Some economists are concerned that the income tax cuts will lead to a decrease in budget revenue which, in turn, will limit the government‘s ability to finance necessary public investments. This could have the potential to cause a negative cyclical effect and further hamper economic growth in the kingdom.
The new Prime Minister is aware of the fiscal obstacles in his way and is working with the Fiscal Policy Office to help devise ways of boosting the economy without compromising the government‘s budget. The proposed policies are being reviewed and, if accepted, Thailand will enter into a new era of economic prosperity.