Economy
From The Report: Thailand 2014
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The second-largest economy in South-east Asia and the 34th-largest worldwide, Thailand had a GDP of $366bn and a per capita income of $5168 in 2012. Over the past decade, the economy has expanded at an average rate of 4.3%. Since 2008, however, there have been large economic swings that have been exacerbated by seasonal changes. As a major exporter, Thailand is exposed to fluctuations in global demand, and weak growth in its key export markets of the EU, the US, and Japan has been a constraint in recent years. Exports contracted by 4% year-on-year by November 2013. With household debt increasing dramatically, the central bank has raised concerns over the pace of loan growth. Over the longer term, the economy will need to boost higher value-added production to drive growth and ensure it is spread more evenly among the population. Political stability will be key to sustaining strong tourism performance and to the public investment that is so crucial for Thailand to achieve its longer-term growth potential.

This chapter contains interviews with Kittiratt Na Ranong, Deputy Prime Minister and Minister of Finance; and Kan Trakulhoon, President and CEO, SCG.

Articles from this Chapter

Overview

Moving on: Building on strong fundamentals, efforts are under way to diversify trade
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South-east Asia’s second-largest economy with a GDP of $366bn and a per capita income of $5168 in 2012, Thailand has the potential to become the world’s 23rdlargest economy by 2050, according to HSBC, up from 34th now. A diversified and competitive export base accounting for 62.3% of GDP in 2012, ranging from agriculture to high-end manufactured goods, and strong domestic demand, albeit from an ageing population of 69m, drove Thailand to upper-middle-income status by 2011. As the country moves…

Interview

OBG talks to Kittiratt Na Ranong, Deputy Prime Minister and Minister of Finance
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Interview:Kittiratt Na Ranong To what extent will the termination of US monetary stimulus impact Thailand’s economic outlook? KITTIRATT NA RANONG: If the US Federal Reserve decides to taper its quantitative easing programme, the effect would be twofold. First, the decision would reflect regained strength of the US economy. As the US economy contributes almost 25% of world GDP, such recovery would positively affect the global economy, as well as the Thai economy through trade, investment,…

Analysis

Multiplier effects: Public investment is needed to support aggregate demand and lower logistics costs
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While both major political parties have tabled successive large-scale infrastructure developments, centring on high-speed rail and dual-tracking of existing lines, political differences have delayed implementation over the past decade. Thailand’s ratio of public investment to GDP fell from 6.9-7.1% in 2002-08 to 5.5-5.9% in 2010-12, according to data from the National Economic and Social Development Board (NESDB). As savings continued to outpace investment, Thailand achieved only modest efficiency…

Interview

OBG talks to Kan Trakulhoon, President and CEO, SCG
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Interview:Kan Trakulhoon To what extent is Thailand’s economic growth being driven by rising activity in the provinces? KAN TRAKULHOON: Despite some currency volatility in the first half of the year, 2013 was a year of relative normalisation for the Thai economy as levels of consumption and investment levelled out following the major stimulus measures of 2012. Domestic consumption has experienced moderate growth, especially outside of Bangkok, while key indicators, including cement demand,…

Analysis

Securing free trade agreements: Enhanced international trade depends on political clarity
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While Thailand is pushing ahead with efforts to expand its network of free trade agreements (FTAs), the lack of a permanent government means that approval and implementation of any deals could be delayed. Thai officials have played down concerns that the political troubles, which may not see a new government installed until at least June 2014, will slow the formalising of a series of bilateral and multilateral FTAs, saying that progress is being made in talks to liberalise trade ties and open up…

Analysis

A balanced approach: Aiming to reduce inequality and increase domestic value added
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Framed by the overarching Sufficiency Economy Philosophy (SEP) developed by King Bhumibol Adulyadej, Thailand’s development policy aims for inclusive and broad-based growth that leverages key strengths of the economy towards higher domestic value added. Having successfully evolved from a primarily agrarian society to an economy with a wide manufacturing base, authorities seek to leverage innovation to avoid the middle-income trap. While hikes in the minimum wage in the past two years aim to promote…