The Thai economy is South-East Asia's second largest, but growth is slowing. Thailand's GDP growth last year was just over 4.0%, and the World Bank has forecast 4.5% growth for the coming year. Positively, the National Economic and Social Development Board recently announced that economic growth picked up to 5.7% year-on-year for the fourth quarter of 2007.
Thailand has a diversified economy with a significant volume of international trade. This trade is heavily dependent on the United States and Japanese markets with these accounting for 35% of total exports. Strong sectors in the economy are motor vehicles, electronic goods, computer and electronic parts, textiles, fisheries, agriculture and food processing. The export sector has proved remarkably resilient in the face of a persistently high baht. Thailand continues to maintain restrictions on foreign entry in key service areas including air transport services, ports and telecommunications. Relaxing these would enhance competition and investment, reduce costs and raise incomes in the services sector. The government recently announced a fiscal stimulus package of $1.4billion which included subsidies to deal with rising fuel costs.
The Thai economy will continue to face challenges with consumer confidence remaining fragile and the economy under pressure from rising oil prices; an over-valued baht; a slow-down in demand from key markets; a rising inflation rate, and declining work place competitiveness. The current account is at the moment enjoying a surplus, but there is the prospect of a deficit in the year ahead if export growth falls.
The major challenges to Thailand's immediate economic outlook are now external, with uncertainty in global markets and economies raising fears of a softening in export performance.
Latest economic information may be obtained from the Bank of Thailand.
Last updated: 04 December 2008