Thailand in reform fever: Economy needs a breath of fresh air now!

Thailand in reform fever: Economy needs a breath of fresh air now!

Thailand faces serious economic challenges that require urgent reform of its economic policies. Thai Bankers' Association (TBA) Chairman Payong Srivanich emphasized that reforms and investments are necessary to strengthen the Thai economy at the Managers media group's iBusiness Forum on July 15, 2025. He explains that the economic strategy should focus on the formal economy and upgrading the labor force to increase population incomes over the next five to seven years. These demands have come amid growing uncertainty from US-imposed tariffs affecting both businesses and households.

The Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) has already held discussions with the Bank of Thailand (BoT) with the aim of promoting economic stability. Payong emphasizes that this critical situation also represents an opportunity for comprehensive reforms. Previous crises in other countries have often been used to modernize their economic structures - an opportunity that Thailand has not yet sufficiently exploited. He sees an urgent need for reform, particularly in export-oriented industries and the production sector.

Technological development and innovation

A key aspect of strengthening the Thai economy is technological development. Payong points out that Thailand ranks 39th in digital and technology skills in 2024, behind countries such as Singapore (2nd), Indonesia (20th) and Malaysia (36th). ChatGPT usage in Thailand is only 6%, far behind other countries such as the Philippines (17%) and Malaysia (14%). In order to increase productivity and per capita GDP, he calls for greater investment in research and development (R&D), which currently accounts for less than 20% of gross domestic product.

In addition to existing economic challenges, Thai Times reports that Thailand is facing a rise in key interest rates, which pushed inflation up nearly one percent in November. The main reasons for this are higher diesel prices and rising costs for food and drinks. In this context, the Bank of Thailand advocates for an urgent increase in international climate finance in order to achieve sustainable development goals. It highlights that there is a significant gap between current financial flows and the global needs raised at the Sustainability Forum 2025.

Environmental sustainability and tax reforms

To balance economic growth with environmental sustainability, Thailand's Board of Investment plans to introduce new tax measures next year. The Treasury is pursuing ambitious tax reforms to increase both competitiveness and fairness. These reforms are expected to include adjustments to corporate, income and value-added taxes to keep pace with global economic standards. Progress towards a more sustainable economic model could be crucial to solving current challenges.

Thailand's path into the future will certainly be influenced by necessary reforms and investments in technology and sustainability. With a clear vision, evident in the statements of business leaders such as Payong Srivanich, Thailand could set the course for a stronger and more resilient economy.

For more information: der-farang.com, thaitimes.com.