Korn, the ex-finance minister, said the economic risks confronting Thailand will originate from both domestic and foreign fronts. The public is worried about the surging cost of living – especially after prices jumped as a result of the recent flood and won't easily come down.
Deputy Premier Kittirat Na-Ranong, who is also the commerce minister, should do more, he said.
The political instability and disputes will deal a direct blow to the economy. This should have been avoided because the Pheu Thai Party scored a resounding victory in the general election, he said.
Economic growth was a paltry 1.1 per cent last year, according to the Finance Ministry, he said. This is very low, and stemmed from the mismanagement of the flood crisis. It’s still unclear how much the impact will extend into the current year.
As for the international outlook, the oil price is still a risk factor but there appears to be less volatility, as bigger economies are demanding less oil. Politics in the Middle East need to be carefully monitored, he said.
The eurozone debt crisis also calls for close scrutiny, as it may have serious consequences for the economy in terms of trade and tourists, he said.
"The economic expansion will also be affected by political factors such as the US presidential election, which will likely not be good news for trading partner nations. The economic expansion in the US is also not good and will impact the Thai economy. This is combined with the slower growth of other trading partners like China and India. So the prospects [for this year] are not as bright as they should be.
“As for the stimulation of domestic consumption, it will be up to the government's management, which includes fiscal tools, so I don't think there will be a crisis. Nevertheless, it will be better than 2011 unless there is a severe political conflict or major natural calamity that the government can't handle," he said.
The government's forecast for the economy to expand by 7 per cent this year is possible because the base was very low last year. However, the government should not get carried away with the growth figure as it doesn't reflect the true well-being of the nation, he said.
"I believe that some of the 15 million voters are beginning to be disappointed as the government has failed to act as it advertised during the election campaign. This includes the Bt15,000 minimum wage, guaranteed rice price, debt moratorium and the expectation that living costs will be reduced. So it is believed this will definitely have an impact on the electoral base of Pheu Thai.
“The government must recognise that any attempt to stir conflict as a result of acting for their own good should not be done, especially with regard to any actions that serve Thaksin. This will be their death trap," he said.
The latest Dusit poll shows that 52.2 per cent of respondents are worried about the high cost of living, 42.7 per cent believe that politics will be as chaotic this year because politicians remain the same.
The survey of 2,114 people conducted from December 20-31 revealed that more than 40 per cent are concerned about corruption, especially budget-related graft.
On the economy, 44.2 per cent believe this year will be better, although the government should quickly restore investor confidence.
On social issues, 53.6 per cent of respondents were concerned about drugs and crime and other vices while 40.6 per cent expect no improvement as the penalties for criminals are not grave enough.