Hyperinflation is a critical risk for the country's economy this year, driven by surging prices of imported fuels, a shortage of agricultural raw materials and electronic components as well as higher cost of transport, according to conglomerate Charoen Pokphand Group (CP).
Suphachai Chearavanont, chief executive of CP, said the global economy is expected to grow 4.1% in 2022, lower than the previous prediction of 4.9%, while Thailand is forecast to register a 3.9% gain.
The global economy is expected to pick up from the third quarter this year amid various risks, he said, citing Morgan Stanley and the World Bank.
"As the world moves away from oil dependence, this results in the shuttering of oil production sites several places around the world. With less oil supply than demand, this has caused oil prices to skyrocket," Mr Suphachai said. "This generates a cost burden for the global economy."
He said the government should focus on three core strategies to drive the country forward.
They comprise agricultural reforms and small and medium-sized enterprise (SME) support; turning the country into the logistics hub of Asia; and promoting startups to allow Thailand to serve as a tech hub.
"We should not only build the purchasing power of the country, but the government should also urgently implement these three strategies to deal with hyperinflation," Mr Suphachai said.
He was speaking at the "2022 Next Economic Chapter: New Challenges and Opportunities" online conference organised by Krungthai Bank yesterday.
The agricultural reforms include supporting water management systems, creating community enterprises and smart farming, as well as promoting the usage of online channels among SMEs.
Thailand can serve as a logistics centre for Asia, driven by the development of the Eastern Economic Corridor (EEC), Industry 4.0 and smart city schemes as well as promotion of green energy use and electric vehicles, said Mr Suphachai.
To support tech hub development, it is essential to attract talent using startup incentives, while existing manpower needs to be upskilled in digital fields, he said.
These moves requires regulatory support, such as a flexible capital gains tax regime for investment in startups, said Mr Suphachai.
There are only 600 startups in Thailand, compared with 55,000 in Singapore and more than 4,000 in Malaysia, he said.
"Increasing the number of tech startups in the country could multiply growth in both digital tech-driven businesses and the country's GDP," Mr Suphachai said.
CP plans to focus more on logistics, fintech services, renewable energy and blockchain tech.
The group wants to create a convergence of foodtech, biotech, genetics and digital tech to pave the way for preventive healthcare, he said.
