Thailand’s economy is in turmoil and the country’s unemployment rate has shot up from 7% to 17% in the past year.
That is partly due to a slowdown in exports and a fall in the value of the Thai baht, a currency pegged to the dollar.
Thailand has been struggling to recover from a devastating 2008-09 financial crisis, when a sovereign wealth fund and a foreign debt default forced the government to slash its spending to rebuild.
The country’s economy has since returned to growth and is expected to grow at 3% this year.
But the country is still not at full employment, and its unemployment rate is now at a record high of 17%.
The Thai economy is currently the fourth largest in the world behind Brazil, Australia and South Korea.
A new study released by the International Monetary Fund on Monday found that the Thai economy has only recovered to about 7% of its pre-crisis size and that it is still too small to provide the economic stability Thailand needs.
In addition to the current downturn, the IMF found that Thailand is still heavily reliant on exports for much of its revenue, and that imports are also far from sufficient to compensate for the shortfall.
The IMF noted that Thailand relies on import subsidies to keep its GDP growing.
“Thailand faces the challenge of finding a way to grow the economy and make ends meet while continuing to reduce the budget deficit, while also ensuring the stability of the financial system,” said IMF Managing Director Christine Lagarde.
The IMF’s report pointed to a number of key weaknesses in Thailand’s economic system, including poor financial oversight, a lack of transparency in its financial market, and a lack in the quality of the local currency.
Thai Finance Minister Prasetya Sarawak has acknowledged that some reforms are needed, but said that he is not convinced the country will see any real economic benefit from them.
“The government has made a lot of progress in the last three years but it is not a big step forward,” he said at a news conference in Bangkok on Monday.
“It is just too soon to say that we are going to see any significant economic change.”
Follow the BBC’s Thammasat news blog for the latest developments.
Thammasats economy has been on the back foot for some time.
Thailand’s GDP fell by more than 4% in 2016 as the country ran out of cash to pay its bills.
The government is now using foreign currency reserves to pay for imports and to shore up its foreign debt.
Thanaviran Thongsakorn, a deputy chairman of the governing coalition, said the country has not been able to borrow to finance its own infrastructure, and the government is unable to borrow money to buy goods.
He said he is worried that the government will lose the confidence of investors if it continues to borrow too much and to continue to do business in areas where there is a lack.
“If we keep borrowing and not doing business, then the country risks going bankrupt,” he told reporters.
Thongsakun said he wants the government and other stakeholders to work together to reduce spending.
“This is a difficult time for the country,” he added.
“We have to change this mindset and focus on the needs of the people and the economy.”
He added that the economic situation is now “very difficult” for the government, but that the economy needs to grow and create jobs.
Thongsakorn also told reporters that there has been no improvement in the competitiveness of Thailand’s exports and that the country does not have the skills and skillset to compete in the global market.
He added: “The problem is not with us; it is the system.
It is the lack of accountability in government and business.”AAP/ABC