At WEF, Thai PM Highlights Sustainable Growth

Thai PM Yingluck Shinawatra told the audience at CNBC Power Breakfast at the World Economic Forum on East Asia on 31 May that the country has strongly rebounded from last year’s floods. In face of higher inflation and the global economic downturn, the government is putting its focus on sustainable and inclusive growth of the domestic economy.

Below is her address:

Excellencies,

Distinguished Guests and Panelists,

Ladies and Gentlemen,

Sawasdee ka. While I am speaking, please enjoy your breakfast.

I am delighted to join this morning’s event hosted by CNBC on the opening day of the 21st World Economic Forum on East Asia. Thailand is proud to host the WEF on East Asia this year. It will provide another opportunity for government and business leaders to exchange ideas on how to address the challenges facing our region.

The topic for this morning’s panel discussion: “Asia’s New Reality: Growth vs. Inflation” is timely. The growth versus inflation dilemma has drawn Asia’s attention.  While Governments in this region are trying to stimulate growth, inflation remains a concern.

In Thailand, the Government is aiming to ensure the right balance between economic growth and price stability. Our economy strongly rebounded from the floods. In the first quarter of this year, it grew by 11 percent from the last quarter and likely to achieve the growth rate of 5.5-6.5 percent for the whole year.

Inflation during the first quarter of this year was 3.4 percent, but it was due to an increase in the prices of fresh food and energy which together increases by 5 percent.  Therefore, the sources of inflation were mainly from the situation in agricultural product market and the world’s oil price. These pressures are softening and the inflation last month reduced to 3.2 percent.

This indicates that inflation this year will be under control. This is my hope. However, we need to work harder to deal with these pressures by increasing supply of alternative energy which we are now producing from energy crops, and coordinating production, processing and marketing of agricultural output in order to reduce price fluctuation.

Given the global economic slowdown, we believe that we still have to give high priority to boosting domestic demand and implementing the budget plan on public investment on schedule.

After facing the major flood last year, we are working hard to make our economy more disaster-resistant and have set aside 11.4 billion US dollars for investing in water infrastructure and management.  In addition, we will accelerate investment in new infrastructures such as rail, high-speed train, energy and telecommunication the projects in the pipeline are worth around 74 billion US dollars.

Ladies and Gentlemen,

We will continue to ensure that we achieve sustainable growth. Thailand already has solid fundamentals such as a growing market, an open and flexible approach to investment and global markets, strategic location with extensive infrastructure and service-oriented culture, a dedicated and quality workforce, and a stable democracy based on rule of law, and respect for diversity. We will enhance this competitiveness by restructuring our industries, developing human resources and further investing in new infrastructure.

We will also continue to implement inclusive growth measures such as the adjustment of minimum wages and increase in the well-being of low income population as well as improving the productivity of firms. Several measures are designed to increase the opportunities of important groups such as SMEs, which is a group of industries that is growing very fast and is becoming a stronger sector; women, and this is not because I am female but I believe that if we improve their quality of life, they can earn money and give back to the family thereby increasing domestic income growth; and the grass-roots population.

Ladies and Gentlemen,

Not only do we focus on our domestic growth, but as the region becomes a key engine of the global economy, we will also find ways to reduce development gaps between countries and increase the growth potential of the region as a whole.  That is why we closely cooperate with our neighbors to develop connectivity and economic corridors so that economic benefits are created and widely distributed.

Lastly, on the political front, Thailand has achieved greater stability.  The Government received a clear mandate from the people in last July’s general election/  which saw the highest voter turnout in Thailand’s history.

With strong economic fundamentals and democratic institutions, Thailand has built the necessary platform for achieving sustainable economic growth and development.  We are now in a better position to provide new opportunities for businesses both local and foreign.  This will contribute towards the continued prosperity of Thailand and the region.

With these remarks, Ladies and Gentlemen, allow me to welcome you to Thailand.  I wish you all the best in your discussions and hope your stay in the Land of Smiles will not only be memorable but also productive.

Thank you very much for your attention.