Boon or curse for Thailand’s long-term economic growth?

Economic experts say that government spending on tax cuts and cash handouts, while popular, creates a cycle of dependency. These policies, they say, solve poverty problems immediately but do not equip recipients with the skills or opportunities to generate income in the long term.

Athiphat Muthitacharoen, a lecturer at Chulalongkorn University’s Department of Economics, pointed to Thailand’s long-standing budget deficit, fueled by populist policies since 2004. Citing data from the Fiscal Policy Bureau and the Public Debt Management Bureau, he said the government’s revenue in 2023 would barely cover regular spending and debt repayments.

“Almost 70% of government spending is difficult to cut, such as state social benefits (12.5%), social benefits for government staff (16.2%), salaries and compensation (25.7%) and debt repayment (12.8%),” he said.