There are imminent risks ahead of Thailand because of the decline in exports as well as the dip in the number of tourist arrivals. This is the reason why the military government is using the enterprises owned and managed by the state in order to fund the proposed economic expansion through a faster investment processing. The tourism industry is taking quite a hit as the accommodations such as beach villas in Thailand are not receiving as much reservations as before.
According to government data, spending by state enterprises have increased by almost 50 per cent and has reached 310.9 billion baht between January and September of this year. Officials have already set a target for each in order to disburse around 95 per cent of the yearly investment goal.
The director general of the State Enterprise Policy Office of the Finance MinistryPrapas Kong-led, said that the large companies are the ones that could help life the economy therefore they are focusing their investments on these firms through the state enterprises and this will go on until the end of this year.
Bloomberg revealed that the growth of the GDP might have slowed down to 4.2 per cent in the previous quarter which is the lowest pace they have recorded for 2018. The expansion is still in place but the two driving forces of the country’s economy, tourism and exports, are struggling because of the slowdown in the Chinese economy front. The burden is now left to other drivers especially investment.
The assets that are under the state firms amounted to 14.3 trillion baht in 2017 and the amount is almost the same as the yearly GDP of Thailand. The state’s issue now lies with increasing the efficiency of the government enterprises despite the fact that they are already milking them for investment.
A finance official said that it is bad for Thailand to have large enterprises managed by the state when the efficiency is very low and the management is quite poor. It might be time to focus on other sectors such as tourism and improving safety in beach villas in Thailand in order to regain the trusts of the foreign visitors one more time.