Although the country’s growth rate is among the lowest in ASEAN, Thailand serves as a gateway to one of the world’s most dynamic markets.
In the 2019 World Bank Group report, Thailand garnered a score of 78.45 out of 100 in the ease of doing business.
It is ranked 27 out of 190 economies and second among its ASEAN neighbors, after Malaysia. Thailand is an upper-middle income country, with the lowest levels of extreme poverty as measured by the International Poverty Line (IPL).
Thailand’s economy is driven by strong domestic demand
While export growth has been affected by the US-China trade war, the International Monetary Fund (IMF) has urged the country to focus on policies for growth and shift from over-reliance on its electronic and automotive industry.
The tourism sector is a pillar of Thailand’s economy. Despite the Phuket boat tragedy which had an adverse effect on Chinese tourist inflows, tourism is still expected to sustain Thailand’s economic growth momentum.
It may be noted that Thailand’s motorcycle market has declined in recent years.
The service sector, including tourism and financial services, continues to grow and contribute to the country’s GDP.
Thailand’s current GDP growth is at 3.3 percent, according to Thailand’s National Economic and Social Development Board (NESDB).
Outlook for 2019
Thailand’s resilience amid the slowing down of the global economy is strengthened by private consumption and private investment.
The Thai Economic Board report for 2019 projects the country’s growth to range from 3.5 to 4.5 percent.
Private consumption will grow by 4.2 percent while total private investment will increase by 5.1 percent. The country is also expected to record a current account surplus of 5.8 percent of its GDP.
Thailand’s export market largely depends on the global market. In fact, China is the country’s largest export destination accounting for 11.4 percent in the third quarter of 2018. Therefore, export value will continue to be affected by the global economy as tensions between the US and China persist. Moreover, Thailand is to hold its first, long-awaited election in March since the 2014 military coup that overthrew the government of Yingluck Shinawatra. Any political instability due to the upcoming elections could also pose a risk to Thailand’s economic expansion.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
World Bank cuts Thailand’s GDP growth outlook to 1% in 2021
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