Ekniti: Act swiftly to avoid crisis

Thailand must act quickly to stem its mounting current account deficit before it spirals into a current account crisis, says Finance Minister Ekniti Nitithanprapas.

In a post on his official Facebook page, Mr Ekniti said that while the government's emergency borrowing decree would increase public debt, the loans are necessary to accelerate Thailand's transition from fossil fuels to clean and renewable energy.

"If we fail to act now, we risk facing one crisis on top of another," he wrote, citing the fact that, after Thailand was hit by soaring oil prices in April and May, the country's current account, which had traditionally remained in surplus, swung into a deficit of nearly 500 billion baht over the past two months.

A major contributing factor was the sharp rise in the cost of crude oil and natural gas imports. If the situation persists and the geopolitical conflicts driving volatility in global oil prices continue, Thailand could face prolonged current account deficits, potentially leading to a current account crisis similar to those experienced in the past, he added.

Mr Ekniti said the government is therefore accelerating the country's energy transition by promoting the use of clean energy vehicles and biodiesel, particularly in public transport, while encouraging households to install rooftop solar systems through a comprehensive net-metering scheme that allows excess electricity to be sold back to the grid.

The government also plans to invest in upgrading the country's electricity transmission network, a key component of a nationwide smart grid. He noted that expansion of the transmission system has been limited by annual budget constraints, making it essential to accelerate investment.

"The 200-billion-baht loan may not be sufficient to finance Thailand's entire clean energy transition, but I intend for projects funded under this borrowing programme to serve as a catalyst, shortening the timeline for the urgent transition needed to strengthen the country's energy and economic security," he said.

Beyond the energy transition, Mr Ekniti said the government must also address long-standing structural weaknesses in the economy. One of the country's chronic problems, he said, is the lack of sufficient investment by both the public and private sectors over many years.

The government has designated this year as the "Year of Investment", focusing on infrastructure development, technological advancement and investment in human capital to enhance Thailand's long-term growth potential.

It also plans to remove regulatory obstacles to make investment easier, with the goal of restoring investment-led growth.

The government aims to gradually raise total investment to around 30% of GDP to strengthen Thailand's long-term economic capacity.

In recent years, Thailand has lacked the investment needed to strengthen its competitiveness. Prior to the 1997 economic crisis, total investment in Thailand accounted for as much as 40% of GDP, but the figure has declined to only 20%.

However, Mr Ekniti stressed that this new wave of investment must go beyond traditional projects and instead help restructure the economy while preparing the country for future industries.

In addition to government budget spending, he said, investment will also come from state enterprises, public-private partnership (PPP) projects and other financing mechanisms such as the Thailand Future Fund.

A key priority is attracting foreign direct investment (FDI) through the Thailand FastPass mechanism, which is expected to generate around 900 billion baht in actual investment this year.

However, he said the government's objective is not merely to increase investment figures or FDI inflows.

"The more important question is how these investments will benefit Thailand, connect Thai businesses -- especially SMEs -- to global modern manufacturing supply chains, create jobs, and improve the quality of Thailand's workforce. These objectives will shape the Board of Investment's new investment incentive strategy," he said.

Mr Ekniti said these challenges stem from deep-rooted structural weaknesses, including economic growth below potential, declining competitiveness, chronic fiscal deficits caused by revenue growth lagging behind expenditure, and years of inadequate infrastructure investment -- particularly in clean energy, which has become critical infrastructure for the modern global economy.

"If we compare the economy to a patient, it is suffering from chronic cancer, and before it has recovered, additional complications have emerged," he said.

Mr Ekniti said the government's long-term objective is to lay the foundation for a stronger and more resilient economy based on what he called the "5T" framework: Target, Transition, Transform, Transparency and Together.

The framework aims to stabilise the economy in the short term ("Stabilise Today"), turn crises into opportunities through an accelerated transition ("Transition Now"), and invest in Thailand's long-term future ("Transform for Tomorrow"), while maintaining fiscal discipline throughout.