THE WORLD BANK (WB) yesterday upgraded its 2017 economic growth projection for Thailand to 3.5 per cent from 3.2 per cent on healthier exports, but warned that at that rate it may take more than 20 years to join the high-income league of countries.
Economic growth in Thailand is gaining traction, with global growth and the domestic recovery from severe droughts revving gross domestic product by 3.3 per cent in the first quarter and 3.7 per cent in the second quarter of this year, from the same quarters last year.
This has caught the market by surprise, the bank said.
Exports are a big factor, as are the recovery of the agricultural sector and government spending, said Ulrich Zachau, director of regional partnerships at the World Bank.
The bank predicts the world economy would expand 2.7 per cent this year and 2.9 per for each of the next couple of years, he added.
Kiatipong Ariyapruchya, the World Bank’s senior economist for Thailand, raised concerns over long-term economic development.
“Should the Thai economy grow 3.5 per cent annually, it would take 23 years to achieve high-income status, “he said.
His prediction diverges from the government‘s 20-year strategy, which aims to reach the rich status within 20 years.
Kiatipong pointed to sluggish private investment, which has dropped to 18 per cent of GDP from a peak of 40 per cent before the 1997 financial crisis.
Private investment in other Asian countries runs at 20-30 per cent of GDP.
There is room for increasing investment if Thailand liberalises the service sector, allowing foreign investors to take more than 49 per cent of equity in service firms, he said.
Thailand could graduate from the middle-income country to become a high-income country in less than 20 years if the country could invest more in services, improve the quality of education and speed up the development of the digital economy, he added.
According to the World Bank, the global digital economy is now worth $11.5 trillion, equivalent to 15.5 per cent of global GDP.
Randeep Sudan, the World Bank’s adviser for digital strategy and government analytics, said Thailand could leapfrog into the digital economy.
Thailand should focus on cyber risk insurance, which would help businesses and individuals protect their data.
Data have been exponentially growth and it becomes valuable asset in digital economy.
The recent wanna cry malware attack has sparked interest in buying insurance protection among businesses, he said.
Thailand should encourage taking stock of data, assign value to data and secure data assets.
Thailand could potentially become a test bed and learning platform for global insurance companies in cyber-risk insurance, he said.
Few countries have started to implement cyber-risk insurance, he said.
The country needs to boost Internet speeds, while embracing the “digital twins”.
A digital twin is a software model of a physical thing or system that relies on sensor data to understand the state of the mind or system, respond to change, improve operations and add value.
Digital Economy and Society Minister Pichet Durongkaveroj gave his assurances that by the end of next year, 75,000 villages across the country would be able to access broadband Internet as the government is now installing fibre optic nationwide.
Currently 12,000 villages have access to broadband Internet and by the end of this year the total villages would be 24,000.