SUPACHAI Panitchpakdi, former secretary-general of the United Nations Conference on Trade and Development (UNCTAD) and former director-general of the World Trade Organisation, yesterday warned the Thai government that if it focused too much on boosting domestic consumption without also supporting exports, it could risk a household debt bubble.
If household debt reaches 100 per cent of gross domestic product, it would be regarded as a crisis point for the country, he told a symposium on “Thailand, a New Decade of Economic Reforms under AEC Cooperation” organised by Bangkok Bank.
The government is shifting the country from relying on exports to riding domestic consumption because the global economy does not support exports. However, the government should not abandon exports, but should proceed in parallel with trends in international trade because some markets are still growing, he said.
The problem of the Thai economy right now is low private investment, Supachai said. Even though the government has attempted to build infrastructure to lure private investment and has also set up special economic zones, private investment is not likely to follow.
The government should find out why, so that it can offer supportive measures to private investors, while the private sector should outline the real reasons for lacking interest in investing in the country.