Thailand’s economy is booming – this is a fact. In comparison to previous years, 2018 marks yet another substantial improvement in GDP. In the first quarter of 2018, GDP reached 5-year highs of 4.8% – this level of growth has not been seen since early 2013. Many factors point towards a sustained growth for the future, which can only mean positive things for Thailand and its citizens. In this article, we look at historical data, factors influencing growth, and an outlook for the future.
Historical data for Thailand GDP growth
To give you an idea of growth trends, here is the historical data. The following is annual GDP data taken from the Trading Economics website for Thailand (figures listed are in terms of Billion USD):
|Year||GDP (Billion USD)|
As you can see, from the relative stagnation of 2013 to 2015, the Thai economy has been on the rise. 2018 looks to continue this trend with continued improvements to GDP. Unemployment remains low at 1%, inflation remains stable, and manufacturing continues to play an important role in the Thai economy.
What factors can be attributed to this excellent growth?
So why is 2018 a fantastic year for Thailand’s economy? What has contributed to renewed growth and confidence? We have listed some of the main factors below:
– Excellent increase in goods and service exports at 6%
– Fantastic increase in private sector investment at 3.1%
– Superb increase in public sector investment at 4%
– Increase in general Thai exports at 11% (highest in 7 years)
– Thailand’s current account has a surplus of 17.1 Billion USD in comparison to 6.7 in 2014
– Thailand’s international reserves have grown from 167 billion USD to 211 billion since 2014
These factors alone all show how strong the Thai economy currently is. Many people believe that tourism is the only contributing source to the economy but the above shows a different story. Yes, tourism is hugely important, but Thailand has many other strong points too. Exports are obviously key in this growth, as is continued investment in the right areas. The following are the different industries that are contributing to Thailand’s booming economy:
Services – Thailand has a hugely competitive service sector. This sector accounts for a large percentage of the countries GDP. Estimates place services at approximately 44% of GDP and 37% of Thailand’s employed workforce.
Banking & Finance – Historically, Thailand’s banking industry has been riddled with corruption and problems. For example, the Baht was attacked during the financial crisis of 1997-98. That being said, the government has worked to reform banking and finance in moves such as the 2004 Financial Sector Reform Master Plan.
Retail – The retail industry in Thailand is still relatively small but does employ over 6 million people. Small business retail is generally the main sector. Large retail groups have less impact although this could change in the future. As cities such as Bangkok continue to develop, we are seeing an influx of new mall and shopping complex developments that could further boost the retail sector.
Tourism – Tourism is one of the fastest growing sectors in Thailand. People from around the world flock to places such as Bangkok, Chiang Mai and Phuket. Tourism is so popular due to Thailand’s exotic climate, amazing culture, and beautiful landscapes and beaches. The government is keen to develop on this and tourism accounted for 17.7% of the country’s GDP in 2016.
How Could Thailand’s Economy Look in the Future?
Will this growth continue in the future? Can Thailand sustain GDP growth of 4.8% or is this figure likely to tail off in 2019? Some economists predict that this growth will ease off in the upcoming months and years. There are several signs that point towards this. For example, several sectors have experienced deficits in growth such as trade and tourism. Other areas remain strong, however, such as manufacturing and private investment. Finally, it is believed that elections may be held in May 2019, which could cause economic uncertainty or further strengthen the economy depending on the outcome.
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