Bangkok, Thailand – Sheltering from the sun on a street corner, Kridsada Ahjed rues the day he got involved with the loan sharks who now gobble up most of his daily earnings.
“I went to the loan sharks because people like me – with no assets or savings – cannot qualify to get help from legitimate banks,” Ahjed, a 40-year-old motorcycle taxi driver, told Al Jazeera.
“Now almost everything I make in a day goes towards paying the interest on my debt.”
Kridsada is far from alone.
Thailand’s household debt reached nearly 87 percent of gross domestic product last year, according to the Bank of Thailand, among the highest on earth.
Nearly $1.5bn of that debt is estimated to be made up of high-interest informal loans.
Kridsada’s personal crisis is part of a wider malaise that has gripped Thailand’s economy
After decades of solid growth, Thailand is displaying all of the hallmarks of the middle-income trap, analysts say, where a combination of low productivity and poor education leaves much of the workforce stuck in low-paid, low-skilled work.
“Thailand suffers not only from the slow return of demand from major export markets, but also from the changing nature of globalisation that hurts its competitiveness,” Pavida Pananond, a professor of international business at Thammasat Business School, told Al Jazeera.
“International trade is being driven more by value-added services that require higher local skills and capabilities. This requires a systemic upgrading of the labour force and local firms’ sophistication beyond short-term handouts and investment incentives.”
Thailand’s Southeast Asian peers, including Indonesia, have bounced back from the pandemic faster [Ajeng Dinar Ulfiana/Reuters]
Whereas other Southeast Asian countries are bouncing back strongly from the economic shock of the COVID-19 pandemic, Thailand has faltered.
Thailand’s economy grew just 1.9 percent last year, according to state economic planners, compared with growth of 5 percent or higher in the Philippines, Indonesia and Vietnam.
Even neighbouring Malaysia, a significantly more developed economy with lower expectations for growth, registered a 3.7 percent expansion.
Despite the recovery of Thailand’s key tourism sector, which accounts for about one-fifth of the economy, its prospects are not looking much better in 2024.
The World Bank on Monday said it expected the Thai economy to 2.8 percent this year, slightly better than Bangkok’s own estimates.
The Philippines, Indonesia, Vietnam and Malaysia are expected to see growth of between 4.3 and 5.8 percent.
Srettha, a property mogul-turned-politician, proudly calls himself the “salesman” of Thailand.
Since taking power in a compromise with the royalist establishment to block the reformist Move Forward Party, the 62-year-old political neophyte travelled the world to seek out free trade deals and promote the country as a base for global manufacturing supply chains.
But after years of Bangkok shirking from fundamental economic reforms, there are fears the economy may be resistant to a quick fix.
Critics say that Thailand’s military leaders for years turned off global investors, became too reliant on China’s economic rise and squandered the potential of young Thais by neglecting to fund an education system capable of producing a workforce suited to the digital era.
The World Bank said in a report released last month that two-thirds of Thai youth and adults were “below the threshold levels of foundational reading literacy”, while three-quarters had poor digital literacy skills.
Meanwhile, Thailand’s English language proficiency ranks among the lowest in the Association of Southeast Asian Nations (ASEAN).
To stimulate the economy, Srettha has proposed providing a 10,000-baht ($280) cash handout to virtually every Thai aged more than 16 – a policy economists and political rivals have slammed as wasteful – expanding visa-free entry to more countries, and legalising casinos.
Prime Minister Srettha Thavisin has described Thailand’s economic situation as a crisis [Andrew Caballera-Reynolds/AFP]
“He faces political risks from ‘doing’ and ‘not doing’ these measures,” Move Forward Party deputy leader Sirikanya Tansakul told Al Jazeera.
“With the big cash handout scheme, he faces legal risks from unlawful government borrowing and of coalition discontent. But if he cannot implement this biggest electoral campaign, he faces public distrust.”
Srettha has also become embroiled in an unusually public dispute with the Bank of Thailand, which he has urged to cut interest rates to spur growth.
The central bank has refused to lower the benchmark rate, currently set at 2.5 percent, stressing the need to safeguard its independence.
In a bleak assessment earlier this year, Pranee Sutthasri, a member of the central bank’s Monetary Policy Department, said the country had “seriously lost its competitive edge”.
Sutthasri pointed to global forces – including China’s slowdown and the wars in Ukraine and the Middle East – as well as the kingdom’s failure to invest in training the population for the digital economy.
“It will continue to lag behind if, instead of making products related to artificial intelligence technology, Thailand keeps making downstream electronics products that people no longer want,” she told reporters in late January.
For Srettha, who was not the public’s first choice at the polls, a bad economy carries political risks.
“Political undercurrents that continue to meddle in domestic politics are red flags for investors,” said Pavida of Thammasat Business School.
“And now they have choices elsewhere without needing to wait until Thailand sorts itself out.”
For many Thais struggling to get by, the faltering economy brings more pressing practical concerns.
Hoo Saengbai, a 61-year-old lottery ticket vendor in Bangkok, said her monthly income has more than halved to as little as $110 over the last few years as people cut back on unnecessary spending.
“I’m not so sure about this government or any government any more,” she told Al Jazeera. “I’m just trying to put food on the table one day at a time. I eat if I earn anything, I don’t eat if I don’t earn. That’s all there is.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
