Economic trends
Thailand is Southeast Asia's second largest economy (behind Indonesia), and 4th richest nation, according to per capita GDP, after Singapore, Brunei and Malaysia. It functions as an anchor economy for the neighboring developing countries like Laos, Burma, and Cambodia. After growing strongly and quickly in 2010, in the fall of 2011 the country suffered the worlds floods in the last fifty years and this disaster greatly affected the industrical core of the country's economy and halted growth. Growth estimates have been revised downward, to 1.5% for 2011 (compared to the originally expected 3.5-4%). Despite the unfavorable international context, growth should resume in 2012 due to the reconstruction efforts.
The new head of government Yingluck Shinawatra will combine economic liberalism and social measures initiated by his brother, the former head of the Thaksin government (2001-2006). These measures include rising the minimum wage, buying rice from farmers at a price above market, offering preferential credit to farmers and improving the quality of free healthcare in the provinces. Programs to support businesses and homes affected by flooding and to improve infrastructure for water supply have also been launched. The central bank will also lower interest rates to support the economy. A decrease of the business tax is also planned. Too dependent on exports, Thailand needs to rebalance the sources of its growth and increase domestic demand by extending its production range. Education and training are another challenge. The country had launched a recovery program called "Thailand: Invest for Strength," which intends to create 1.5 million jobs and stimulate private consumption. In the medium term, the government seeks to strengthen infrastructure and to develop the financial sector, to ensure sustainable and dynamic growth.
Significant progress has been made in terms of development: poverty has decreased sharply during the last decades. In spite of the crisis’ impact on the country, unemployment rate has remained low (1.4%).
Main branches of industry
The Thai economy is heavily based on agriculture, which contributes around 10% of the GDP and employs almost 40% of the active population. The country is one of the leading producers and exporters of rice and also has rubber, sugar, corn, jute, cotton and tobacco as major crops. Fishing is an important activity as Thailand is a major exporter of farmed shrimp. However, agriculture's contribution to the GDP has relatively declined, while the exports of goods and services has increased.
The manufacturing sector accounts for just under half of the GDP and is well diversified. The main Thai industries are electronics, steel and automotive. Thailand is an assembly hub for international car brands. Electrical components and appliances, computers, cement production, furniture and plastic products are also important sectors. The textile sector employs around 25% of the active population but is no longer as dynamic as tourism which has become the main source of foreign exchange.
The tertiary sector, including tourism and financial services, contributes about half of the GDP.
International trade
Thailand is an emerging economy, very dependent on exports, which account for more than two-thirds of the GDP. Thailand is very open to international trade (trade represented on average almost 140% of the GDP in 2009) and is an active member of ASEAN.
The country's three main export partners are: the United States, Japan and China. Main export commodities are electric and electronic equipment, machinery, vehicles, rubber, and plastics. The main import partners are: Japan, ASEAN, China, the EU and the United States. Thailand mainly imports electric and electronic equipment, mineral fuels and oil, machinery, iron and steel, and plastics. Thailand shows a trade surplus. Despite the floods which have struck the industrial core of the country, exports grew considerably in 2011, however, the faster growth of imports led to a reduction of the trade surplus.
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Last updates: May 2012
