Thailand: an Economy on the Rise
Economy September 26, 2018
Amidst all the focus on the countdown towards general elections in Thailand, one piece of positive news that has gone somewhat under the radar are the strong economic figures coming out ofthe country.
Official statistics recently released by the Ministry of Finance of Thailand indicate that the Thai economy performed substantially better during the first quarter of 2018, compared with the corresponding period 4 years ago in 2014.
GDP growth in the first quarter of this year reached 4.8 percent, which is the highest in 5 years. This has in part been fueled by a strong 6 percent rise in the export of goods and services as well as an increase in both private sector and public sector investment, registering 3.1 percent and 4 percent respectively. The Ministry of Commerce also announced that Thai exports during the first 6 months of 2018 grew by 11 percent, which is the highest rate in 7 years.
Various international institutions share the same positive outlook on Thailand. The International Monetary Fund (IMF) has projected that the kingdom’s strong growth is expected to continue throughout 2018 and well into 2019. The Asian Development Bank (ADB) recently revised upwards its projected growth estimates for Thailand, the only country in Southeast Asia to receive this distinction.
One barometer of how efficiently an economy is running and the factors of production are being used is the so-called “production capacity utilization rate”. In 2018, this important index increased from around 63 percent in the first quarter of 2014 to some 72.4 percent in the first quarter of 2018. Again, this was the country’s highest rate for the past 5 years.
Thailand’s booming tourist industry has played a key role in the country’s economic success, with the number of foreign tourists increasing virtually every year – from 25 million in 2014 to 35 million last year – a remarkable 40 percent increase in the space of only four years. Such tourists travel to all regions of the country but it should be noted that,for two years in a row, Bangkok has been named the “most popular city for international tourists” by MasterCard.
The overall strength of the economy and the prevailing sense of confidence is underscored by Thailand’s stock market index, which has registered a number of record highs during the past four years, rising from 1,376 points in the first quarter of 2014 to 1,776 points in the first quarter of 2018.
The country’s strong economic fundamentals are reflected in a few other key economic indices. Thailand’s current account enjoyed a surplus of 17.1 billion US dollars in the first quarter of 2018, compared to 6.7 billion US dollars in the first quarter of 2014. Over the same period, the country’s international reserves, which oncestood at 167 billion US dollars four years ago, have now grown toover 211 billion US dollars at present.
The favourable current account surplus and high foreign reserves, combined with the country’s continually low unemployment and inflation rates have placed Thailand in a very enviable economic position. These figures are the main reason why Thailand has been named the “happiest economy in the world” for four years in a row, according to the Bloomberg Misery Index.
Other international publications have also ranked Thailand’s economy highly, particularly U.S. News and World Report, which has named Thailand No. 1 in the world for two straight years (2016 and 2017) in the category of “best country to start a business”.In addition, Thailand was ranked No. 8 for “best country to invest in”, which speaks volumes for the international community’s confidence in the Thai economy.
All of the above reflects the earnest efforts of the present government of Prime Minister Prayut Chan-o-cha over the past 4 years to reform the Thai economy and bring about a better standard of living for the entire population. With other major schemes in the pipeline, such as the Eastern Economic Corridor (EEC) and other initiatives under the Government’s Thailand 4.0 policy, the future is looking increasingly bright for Thailand and her people.