Thailand, or officially known as the Kingdom of Thailand, is one of the most important economies in Southeast Asia region. Thailand occupied 513,120 square kilometres of land and with over 68 million population. Thailand is the second biggest economy in the Southeast Asia region right after Indonesia.
Thailand is considered by many as a new industrialised country and an emerging economy. It also ranks fourth in GDP per capita ranking of Southeast Asia, only behind Singapore, Brunei, and Malaysia. Thailand also serves as an economic anchor for its neighbouring countries, such as Laos, Myanmar, and Cambodia.
Over the last four decades, Thailand has exhibited prominent socio-economic development. In less than a generation, it has shifted its status from a low-income country to a higher-income country. Therefore, it has set an example as success story of strong economic growth and poverty reduction, especially in the 1980s and early 1990s of which Thailand grew 12.4 percent annually.
Many have speculated that the domestic turmoil in Thailand’s politics will disturb the nation's economy. However, those speculations are not entirely correct as Thailand has proven itself to be a resilient economy. Thailand‘s economy is predicted to still grow at a moderate pace, according to the International Monetary Fund (IMF). The main reason is the policies to boost its national consumption has been implemented by military-controlled government. This has successfully increased public spending on infrastructure to attract investments. The government has also made the regulatory framework to be more transparent and efficient to better align the economy with international marketplaces.
Public investment in Thailand is expected to remain as the main economic driver in the coming years. The government’s plan to ease investment through infrastructure is predicted to also help maintaining private investment towards the country. Thailand’s economy is projected to grow at 3.7 percent rate in 2020, falling from current 3.9 percent growth, due to the increasing tensions between the United States and China in the trade wars.
Global trade has been very crucial for the country’s economy. Exports account for two-thirds of the nation's GDP. This is due to the fact that Thailand has generally pro-investment policies, a free-enterprise economy, and well-developed infrastructure. Thailand’s exports are comprised of different products across many industries, such as processed foods, automobiles and parts, and electronics. When combined with service sectors, including tourism and financial services, they achieved about 90 percent of Thailand’s GDP.
The manufacturing sector accounts for 35 percent of Thailand’s total GDP. This fact conforms with Thailand’s reputation as an international hub for foreign car assembly. By taking advantage of ASEAN Free Trade Association (AFTA), eight car manufacturers have set up their assembly in Thailand; five of which are Japanese, two American brands, and an Indian brand. Other than automobiles, electronics, computers, cement production and plastic products are also considered important sectors.
On the other hand 8.2 percent of GDP is contributed by the agricultural sector, which employs around 32.8 percent of the whole nation’s labor forces. Thailand is a global leader in many export products, such as rice and farmed shrimp. Other agricultural products such as cotton, rubber, corn and sugar are also some of Thailand’s major crops. This is due to the fact that among other Greater Mekong sub-regions, Thailand has the most arable land with around 27.25 percent of its total land space.
Tourism also plays a major role in boosting Thailand’s economy. Tourism sectors in Thailand adds up to 17.7 percent of the nation's GDP, as it has been a long favourite tourist destination in Southeast Asia region. According to Thai government, it is predicted that close to 40 million international tourists will travel to Thailand in 2019. These international visitors will also contribute across other sectors in Thailand, as they will purchase other Thai goods and services during their visit in the country. Thailand initiatives to make their country an ideal tourist destination has paid off and successfully supported the nation’s economic development.
Opportunities are wide open for multinational companies as well as local businesses to grow and expand their businesses in Thailand. The country’s economic stability as well as its presence in the regional and global market have proven that Thailand would be an ideal market to grow and expand many businesses.
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