Professional Documents
Culture Documents
Economy of Thailand
Economy of Thailand
Economy of Thailand
Economy of Thailand
Trade WTO, APEC, IOR-ARC, ASEAN, RCEP
organisations
Statistics
2.8% (2022f)[5]
3.7% (2023f)[5]
GDP per capita $7,630 (nominal; 2022)[4]
Industry: 39.2%
Services: 52.4%
(2012)[6]
Inflation (CPI) −1.1% (2020 est.)[7]
Population 9.9% (2018)[8]
below poverty
8.6% on less than $5.50/day (2018)[9]
line
Gini coefficient 34.9 medium (2019, World Bank)[10]
Human 0.800 very high (2021)[11] (66th)
Development
0.646 medium IHDI (2019)[12]
Index
Labour force 38,917,441 (2019)[13]
auto manufacturing, heavy and light
industries, appliances, computers and
parts, furniture, plastics, textiles and garments, agricultural
processing, beverages, tobacco
Ease-of-doing- 21st (very easy, 2020)[15]
business rank
External
parts (12%), stone and glass (7%), textiles and furniture (4%)
Main export United States 11.4%
partners
China 11%
Japan 9.6%
Others 52.4%
(2016)[19]
goods, fuels
Main import China 21.6%
partners
Japan 15.8%
European Union 9.3%
Malaysia 5.6%
Others 41.5%
(2016)[19]
FDI stock $205.5 billion (2017 est.)[20]
Gross external $163.402.95 billion (Q1 2019)[21]
debt
Public finances
Public debt 44.01% (May 2020)[22]
Economic aid None
Credit rating Standard & Poor's:[25][26]
A- (Domestic)
BBB+ (Foreign)
A (T&C Assessment)
Outlook: Stable
Moody's:[26]
Baa1
Outlook: Stable
Fitch:[27]
A- (Country Ceiling)
Outlook: Stable
A+ (Country Ceiling)
Outlook: Stable
Foreign reserves US$266.09 billion (net amount, June 2020)[29]
Contents
History[edit]
Before 1945[edit]
Thailand, formerly known as Siam, opened to foreign contact in the pre-industrial era.
Despite the scarcity of resources in Siam, coastal ports and cities and those at the river
mouth were early economic centers which welcomed merchants from Persia, the Arab
countries, India, and China. The rise of Ayutthaya during the 14th century was
connected to renewed Chinese commercial activity, and the kingdom became one of
the most prosperous trade centers in Asia.
When the capital of the kingdom moved to Bangkok during the 19th century, foreign
trade (particularly with China) became the focus of the government. Chinese merchants
came to trade; some settled in the country and received official positions. A number of
Chinese merchants and migrants became high dignitaries in the court.
From the mid-19th century onward, European merchants were increasingly active.
The Bowring Treaty, signed in 1855, guaranteed the privileges of British traders.
The Harris Treaty of 1856, which updated the Roberts Treaty of 1833, extended the
same guarantees to American traders.
The domestic market developed slowly, with serfdom a possible cause of domestic
stagnation. Most of the male population in Siam was in the service of court officials,
while their wives and daughters may have traded on a small scale in local markets.
Those who were heavily indebted might sell themselves as slaves. King Rama
V abolished serfdom and slavery in 1901 and 1905, respectively.
From the early 20th century to the end of World War II, Siam's economy gradually
became globalized. Major entrepreneurs were ethnic Chinese who became Siamese
nationals. Exports of agricultural products (especially rice) were very important and
Thailand has been among the top rice exporters in the world. The Siamese economy
suffered greatly from the Great Depression, a cause of the Siamese revolution of 1932.
[46]
Significant investment in education in the 1930s (and again in the 1950s) laid the basis
for economic growth, as did a liberal approach to trade and investment. [47]
After 1945[edit]
Life in Thailand
Cuisine
Culture
Dance
Instruments
Demographics
Economy
Education
Film
Holidays
Languages
Literature
Media
Monarchy
Music
Politics
Religion
Society
Sport
Tourism
v
t
e
1945–1955[edit]
Postwar domestic and international politics played significant roles in Thai economic
development for most of the Cold War era. From 1945 to 1947 (when the Cold War had
not yet begun), the Thai economy suffered because of the Second World War. During
the war, the Thai government (led by Field Marshal Luang Phibulsongkram) allied with
Japan and declared war against the Allies. After the war, Thailand had to supply 1.5
million tons of rice to Western countries without charge, a burden on the country's
economic recovery. The government tried to solve the problem by establishing a rice
office to oversee the rice trade. During this period, a multiple-exchange-rate system was
introduced amid fiscal problems, and the kingdom experienced a shortage of consumer
goods.[48]
In November 1947, a brief democratic period was ended by a military coup and the Thai
economy regained its momentum. In his dissertation, Somsak Nilnopkoon considers the
period from 1947 to 1951 one of prosperity. [48] By April 1948, junta Phibulsongkram, the
wartime prime minister, returned to his previous office. He, however, was caught in a
power struggle between his subordinates. To preserve his power, Phibulsongkram
began an anti-communist campaign to seek support from the United States. [49] As a
result, from 1950 onward, Thailand received military and economic aid from the US. The
Phibulsongkram government established many state enterprises, which were seen as
economic nationalism. The state (and its bureaucrats) dominated capital allocation in
the kingdom. Ammar Siamwalla, one of Thailand's most prominent economists, calls it
the period of "bureaucratic capitalism". [49]
1955–1985[edit]
In 1955, Thailand began to see a change in its economy fueled by domestic and
international politics. The power struggle between the two main factions of the Phibul
regime—led by Police General Phao Sriyanond and General (later, Field Marshal) Sarit
Thanarat—increased, causing Sriyanonda to unsuccessfully seek support from the US
for a coup against Phibulsongkram regime. Luang Phibulsongkram attempted to
democratize his regime, seeking popular support by developing the economy. He again
turned to the US, asking for economic rather than military aid. The US responded with
unprecedented economic aid to the kingdom from 1955 to 1959. [49] The Phibulsongkram
government also made important changes to the country's fiscal policies, including
scrapping the multiple-exchange-rate system in favor of a fixed, unified system which
was in use until 1984. The government also neutralized trade and conducted secret
diplomacy with the People's Republic of China, displeasing the United States.
Despite his attempts to maintain power, Luang Phibulsongkram was deposed (with
Field Marshal Phin Choonhavan and Police General Phao Sriyanond) on 16 September
1957 in a coup led by Field Marshal Sarit Thanarat. The Thanarat regime (in power from
1957 to 1973) maintained the course set by the Phibulsongkram regime with US
support after severing all ties with the People's Republic of China and supporting US
operations in Indochina. It developed the country's infrastructure and privatized state
enterprises unrelated to that infrastructure. During this period, a number of economic
institutions were established, including the Bureau of Budget, the NESDC, and
the Thailand Board of Investment (BOI). The National Economic and Social
Development Plan was implemented in 1961. [50] During this period, the market-oriented
Import-Substituting Industrialization (ISI) led to economic expansion in the kingdom
during the 1960s.[51] According to former President Richard M. Nixon's 1967 Foreign
Affairs article, Thailand entered a period of rapid growth in 1958 (with an average
growth rate of seven percent a year).[52]
From the 1970s to 1984, Thailand suffered from many economic problems: decreasing
US investment, budget deficits, oil-price spikes, and inflation. Domestic politics were
also unstable. With the Vietnamese occupation of Cambodia on 25 December 1978,
Thailand became the front-line state in the struggle against communism, surrounded by
three communist countries and a socialist Burma under General Ne Win. Successive
governments tried to solve the economic problems by promoting exports and tourism,
still important for the Thai economy.[53]
One of the best-known measures to deal with the economic problems of that time was
implemented under General Prem Tinsulanonda's government, in power from 1980 to
1988. Between 1981 and 1984, the government devalued the national currency, the
Thai baht (THB), three times. On 12 May 1981, it was devalued by 1.07 percent, from
THB20.775/US$ to THB21/US$. On 15 July 1981, it was again devalued, this time by
8.7 percent (from THB21/US$ to THB23/US$). The third devaluation, on 5 November
1984, was the most significant: 15 percent, from THB23/US$ to THB27/US$. [54] The
government also replaced the country's fixed exchange rate (where it was pegged to the
US dollar) with a "multiple currency basket peg system" in which the US dollar bore 80
percent of the weight.[55] Calculated from the IMF's World Economic Outlook Database,
in the period 1980–1984, the Thai economy had an average GDP growth rate of 5.4
percent.[56]
1985–1997[edit]
Concurrent with the third devaluation of the Thai baht, on 22 September 1985, Japan,
the US, the United Kingdom, France, and West Germany signed the Plaza Accord to
depreciate the US dollar in relation to the yen and the Deutsche Mark. Since the dollar
accounted for 80 percent of the Thai currency basket, the baht was depreciated further,
making Thailand's exports more competitive and the country more attractive to foreign
direct investment (FDI) (especially from Japan, whose currency had appreciated since
1985). In 1988, Prem Tinsulanonda resigned and was succeeded by Chatichai
Choonhavan, the first democratically elected prime minister of Thailand since 1976.
The Cambodian-Vietnamese War was ending; Vietnam gradually retreated from
Cambodia by 1989, enhancing Thai economic development.
After the 1984 baht devaluation and the 1985 Plaza Accord, although the public sector
struggled due to fiscal constraints, the private sector grew. The country's improved
foreign trade and an influx of foreign direct investment (mainly from Japan) triggered an
economic boom from 1987 to 1996. Although Thailand had previously promoted its
exports, during this period the country shifted from import-substitution (ISI) to export-
oriented industrialization (EOI). During this decade the Thai GDP (calculated from the
IMF World Economic Outlook database) had an average growth rate of 9.5 percent per
year, with a peak of 13.3 percent in 1988.[56] In the same period, the volume of Thai
exports of goods and services had an average growth rate of 14.8 percent, with a peak
of 26.1 percent in 1988.[56]
Economic problems persisted. From 1987 to 1996, Thailand experienced a current
account deficit averaging −5.4 percent of GDP per year, and the deficit continued to
increase. In 1996, the current account deficit accounted for −7.887 percent of GDP
(US$14.351 billion).[56] A shortage of capital was another problem. The first Chuan
Leekpai government, in office from September 1992 to May 1995, tried to solve this
problem by granting Bangkok International Banking Facility (BIBF) licenses to Thai
banks in 1993. This allowed BIBF banks to benefit from Thailand's high-interest rate by
borrowing from foreign financial institutions at low interest and loaning to Thai
businesses. By 1997, foreign debt had risen to US$109,276 billion (65% of which was
short-term debt), while Thailand had US$38,700 billion in international reserves. [57] Many
loans were backed by real estate, creating an economic bubble. By late 1996, there was
a loss of confidence in the country's financial institutions; the government closed
18 trust companies and three commercial banks. The following year, 56 financial
institutions were closed by the government. [57]
Another problem was foreign speculation. Aware of Thailand's economic problems and
its currency basket exchange rate, foreign speculators (including hedge funds) were
certain that the government would again devalue the baht, under pressure on both
the spot and forward markets. In the spot market, to force devaluation, speculators took
out loans in baht and made loans in dollars. In the forward market, speculators
(believing that the baht would soon be devalued) bet against the currency by contracting
with dealers who would give dollars in return for an agreement to repay a specific
amount of baht several months in the future. [58]
In the government, there was a call from Virapong Ramangkul (one of Prime
Minister Chavalit Yongchaiyudh's economic advisers) to devalue the baht, which was
supported by former Prime Minister Prem Tinsulanonda. [59] Yongchaiyudh ignored them,
relying on the Bank of Thailand (led by Governor Rerngchai Marakanond, who spent as
much as US$24,000 billion – about two-thirds of Thailand's international reserves) to
protect the baht. On 2 July 1997, Thailand had US$2,850 billion remaining in
international reserves,[57] and could no longer protect the baht. That day Marakanond
decided to float the baht, triggering the 1997 Asian Financial Crisis.
1997–2000[edit]
The Thai economy collapsed as a result of the 1997 Asian financial crisis. Within a few
months, the value of the baht floated from THB25/US$ (its lowest point) to THB56/US$.
The Stock Exchange of Thailand (SET) dropped from a peak of 1,753.73 in 1994 to a
low of 207.31 in 1998.[60] The country's GDP dropped from THB3.115 trillion at the end
of 1996 to THB2.749 trillion at the end of 1998. In dollar terms, it took Thailand as long
as 10 years to regain its 1996 GDP. The unemployment rate went up nearly threefold:
from 1.5 percent of the labor force in 1996 to 4.4 percent in 1998. [61]
A sharp decrease in the value of the baht abruptly increased foreign debt, undermining
financial institutions. Many were sold, in part, to foreign investors while others went
bankrupt. Due to low international reserves from the Bank of Thailand's currency-
protection measures, the government had to accept a loan from the International
Monetary Fund (IMF). Overall, Thailand received US$17.2 billion in aid.[62]
The crisis impacted Thai politics. One direct effect was that Prime Minister Chavalit
Yongchaiyudh resigned under pressure on 6 November 1997, succeeded by opposition
leader Chuan Leekpai. The second Leekpai government, in office from November 1997
to February 2001, tried to implement economic reforms based on IMF-guided neo-
liberal capitalism. It pursued strict fiscal policies (keeping interest rates high and cutting
government spending), enacting 11 laws it called "bitter medicine" and critics called "the
11 nation-selling laws". The Thai government and its supporters maintained that with
these measures, the Thai economy improved.
In 1999, Thailand had a positive GDP growth rate for the first time since the crisis. Many
critics, however, mistrusted the IMF and maintained that government-spending cuts
harmed the recovery. Unlike economic problems in Latin America and Africa, they
asserted, the Asian financial crisis was born in the private sector and the IMF measures
were inappropriate. The positive growth rate in 1999 was because the country's GDP
had gone down for two consecutive years, as much as −10.5 percent in 1998 alone. In
terms of the baht, it was not until 2002 (in dollar terms, not until 2006) that Thailand
would regain its 1996 GDP. An additional 1999 loan from the Miyazawa Plan made the
question of whether (or to what extent) the Leekpai government helped the Thai
economy controversial.
Recent economic history (2001-present)[edit]
An indirect effect of the financial crisis on Thai politics was the rise of Thaksin
Shinawatra. In reaction to the government's economic policies, Thaksin
Shinawatra's Thai Rak Thai Party won a landslide victory over Leekpai's Democrat
Party in the 2001 general election and took office in February 2001. Although weak
export demand held the GDP growth rate to 2.2 percent in the first year of his
administration, the first Thaksin Shinawatra government performed well from 2002 to
2004 with growth rates of 5.3, 7.1 and 6.3 percent respectively. His policy was later
called Thaksinomics. During Thaksin's first term, Thailand's economy regained
momentum and the country paid its IMF debt by July 2003 (two years ahead of
schedule). Despite criticism of Thaksinomics, Thaksin's party won another landslide
victory over the Democrat Party in the 2005 general election. The official economic data
related to Thanksinomics reveals that between 2001 and 2011, Isan's GDP per capita
more than doubled to US$1,475, while, over the same period, GDP in the Bangkok area
rose from US$7,900 to nearly US$13,000.[63]
By the end of 2008, a coalition government led by Abhisit Vejjajiva's Democrat Party
was formed: "[The] legitimacy of the Abhisit government has been questioned since the
first day that the Democrat party took the office in 2008 as it was allegedly formed by
the military in a military camp".[66] The government was under pressure from the US
financial crisis and the Red Shirts, who refused to acknowledge Abhisit Vejjajiva's prime
ministry and called for new elections as soon as possible. However, Abhisit rejected the
call until he dissolved the parliament for a new election in May 2011. In 2009, his first
year in office, Thailand experienced a negative growth rate for the first time since the
1997 financial crisis: a GDP of −2.3 percent. [65]
In 2010, the country's growth rate increased to 7.8 percent. However, with the instability
surrounding the major 2010 protests, the GDP growth of Thailand settled at around 4–5
percent from highs of 5–7 percent under the previous civilian administration—political
uncertainty was identified as the primary cause of a decline in investor and consumer
confidence. The IMF predicted that the Thai economy would rebound strongly from the
low 0.1 percent GDP growth in 2011, to 5.5 percent in 2012 and then 7.5 percent in
2013, due to the accommodating monetary policy of the Bank of Thailand, as well as a
package of fiscal stimulus measures introduced by the incumbent Yingluck
Shinawatra government.[67]
In the first two-quarters of 2011, when the political situation was relatively calm, the Thai
GDP grew by 3.2 and 2.7 percent (YoY).[65] Under Abhisit's administration, Thailand's
ranking fell from 26 in 2009, to 27 in 2010 and 2011, [64] and the country's infrastructure
declined since 2009.[64]
In the 2011 general election, the pro-Thaksin Pheu Thai Party again won a decisive
victory over the Democrat Party, and Thaksin's youngest sister, Yingluck Shinawatra,
succeeded Abhisit as prime minister. Elected in July, the Pheu Thai Party-led
government began its administration in late-August, and when Yingluck entered office,
the 2011 Thailand floods threatened the country—from 25 July 2011 to 16 January
2012, flood waters covered 65 of the country's 76 provinces. The World Bank assessed
the total damage in December 2011 and reported a cost of THB1.425 trillion (about
US$45.7 billion).[68]
The 2011 GDP growth rate fell to 0.1 percent, with a contraction of 8.9 percent (YoY) in
Q4 alone.[69] The country's overall competitiveness ranking, according to the IMD World
Competitiveness Scoreboard, fell from 27 in 2011 to 30 in 2012. [70]
In 2012, Thailand was recovering from the previous year's severe flood. The Yingluck
government planned to develop the country's infrastructure, ranging from a long-term
water-management system to logistics. The Eurozone crisis reportedly harmed
Thailand's economic growth in 2012, directly and indirectly affecting the country's
exports. Thailand's GDP grew by 6.5 percent, with a headline inflation rate of 3.02
percent, and a current account surplus of 0.7 percent of the country's GDP. [31]
On 23 December 2013, the Thai baht dropped to a three-year low due to the political
unrest during the preceding months. According to Bloomberg, the Thai currency lost 4.6
percent over November and December, while the main stock index also dropped (9.1
percent).[71]
Following the Thai military coup in May 2014, Agence France Presse (AFP) published
an article that claimed that the nation was on the "verge of recession". Published on 17
June 2014, the article's main subject is the departure of nearly 180,000 Cambodians
from Thailand due to fears of an immigration "clampdown", but concluded with
information on the Thai economy's contraction of 2.1 percent quarter-on-quarter, from
January to the end of March 2014.[72]
Since the cessation of the curfew that was enacted by the military in May 2014, the
Federation of Thai Industries (FTI)'s chairman, Supant Mongkolsuthree, said that he
projects growth of 2.5–3 percent for the Thai economy in 2014, as well as a
revitalisation of the Thai tourist industry in the second half of 2014. Furthermore, Supant
also cited the Board of Investment's future consideration of a backlog of investment
projects, estimated at about 700 billion baht, as an economically beneficial process that
would occur around October 2014.[73]
Thailand's economy suffered a slowdown around the mid-2010s under the helm of Prime Minister Chan-ocha
Thailand's flagging economic performance led, at the end of 2015, to increased criticism
of the National Council for Peace and Order's (NCPO) handling of the economy, both at
home and in influential Western media.[74][75] The country's economic growth of 2.8% in
the first quarter of 2019 was recorded to be the slowest since 2014. [76]
The military government unveiled its newest economic initiative, "Thailand 4.0", in 2016.
Thailand 4.0 is the "...master plan to free Thailand from the middle-income trap, making
it a high-income nation in five years."[77]
The government narrative describes Thailand 1.0 as the agrarian economy of Thailand
decades ago. Thailand 1.0 gave way to Thailand 2.0, when the nation's economy
moved on to light industry, textiles, and food processing. Thailand 3.0 describes the
present day, with heavy industry and energy accounting for up to 70 percent of the Thai
GDP.[77] Thailand 4.0 is described as an economy driven by high-tech industries and
innovation that will lead to the production of value-added products and services.
According to General Prayut Chan-o-cha, the prime minister, Thailand 4.0 is composed
of three elements: 1. Make Thailand a high-income nation, 2. Make Thailand a more
inclusive society, and 3. Focus on sustainable growth and development. [78]
Critics of Thailand 4.0 point out that Thailand lacks the specialists and experts,
especially in high-technology, needed to modernise Thai industry. "...the government
will have to allow the import of foreign specialists to help bring forward Thailand 4.0,"
said Somchai Jitsuchon, research director for inclusive development at the Thailand
Development Research Institute (TDRI). "...that won't be easy as local professional
associations will oppose the idea as they want to reserve those professional careers for
Thais only".[77] He went on to point out that only 56 percent of Thailand's population has
access to the Internet, an obstacle to the creation of a high-tech workforce. A major
thrust of Thailand 4.0 is encouraging a move to robotic manufacturing. But Thailand's
membership in the ASEAN Economic Community (AEC), makes cheap workers from
neighbouring countries even more readily available, which will make it harder to make
the economic case to switch to robots. Somchai also pointed out that the bureaucratic
nature of the Thai government will make realisation of Thailand 4.0 difficult. Every action
plan calls for results from several ministries, "all of which are big, clumsily-run
organisations" slow to perform.[77]
In September 2020, World Bank forecast that Thai economy would contract 8.9% by the
end of the year due to COVID-19 pandemic.[79] The Thai government cut jet fuel
tax since February 2020.[80]
Macroeconomic trends[edit]
The following table shows the main economic indicators in 1980–2021 (with IMF staff
estimates in 2022–2027). Inflation under 5% is in green. [81]
GDP GDP
GDP Inflation Unemploymen Government
GDP per GDP per
growth rate t debt
Year capita (in Bil.
capita
(in Bil. US$nominal) (in
(in US$ (in US$ (real) (in Percent) (in % of GDP)
US$PPP) Percent)
PPP) nominal)
Over the past 32 years, the economy of Thailand has expanded. The GDP at current
prices shows that from 1980 to 2012 the Thai economy has expanded nearly sixteen-
fold when measured in baht, or nearly eleven-fold when measured in dollars. This
makes Thailand the 32nd-biggest economy in the world, according to the IMF. With
regard to GDP, Thailand has undergone five periods of economic growth. From 1980 to
1984, the economy has grown by an average of 5.4 percent per year. Regional
businesses account for 70 percent of GDP, with Bangkok contributing 30 percent. [82]
After the 1984 baht devaluation and the 1985 Plaza Accord, a significant amount of
foreign direct investment (mainly from Japan) raised the average growth rate per year to
8.8 percent from 1985 to 1996 before slumping to −5.9 percent per year from 1997 to
1998. From 1999 to 2006, Thailand averaged a growth rate of 5.0 percent per year.
Since 2007, the country has faced a number of challenges: a military coup in late 2006,
political turmoil from 2008 to 2011, the US financial crisis reaching its peak from 2008 to
2009, floods in 2010 and 2011, and the 2012 Eurozone crisis. As a result, from 2007 to
2012 the average GDP growth rate was 3.25 percent per year.
Thailand suffers by comparison with neighboring countries in terms of GDP per capita.
In 2011, China's nominal GDP per capita surpassed Thailand's, giving the latter the
lowest nominal GDP per capita of its peers. According to the IMF, in 2012 Thailand
ranked 92nd in the world in its nominal GDP per capita.
Industries[edit]
SMEs[edit]
Virtually all of Thailand's firms, 99.7 percent, or 2.7 million enterprises, are classed as
being small or medium-sized enterprises (SMEs). As of 2017, SMEs account for 80.3
percent (13 million) of Thailand's total employment. In sheer numbers SMEs
predominate, but their contribution to the nation's GDP decreased from 41.3 percent of
GDP in 2002 to 37.4 percent in 2013. Their declining contribution is reflected in their
turnover rate: seventy percent fail within "...a few years". [87]: 47
Agriculture, forestry and fishing[edit]
Main article: Agriculture in Thailand
Thailand has been the largest rice exporter in the world. Forty-nine percent of Thailand's labor force is
employed in agriculture.[88]
Developments in agriculture since the 1960s have supported Thailand's transition to an
industrialised economy.[88] As recently as 1980, agriculture supplied 70 percent of
employment.[88] In 2008, agriculture, forestry and fishing contributed 8.4 percent to GDP;
in rural areas, farm jobs supply half of employment. [88] Rice is the most important crop in
the country and Thailand had long been the world's number one exporter of rice, until
recently falling behind both India and Vietnam. [89] It is a major exporter of shrimp. Other
crops include coconuts, corn, rubber, soybeans, sugarcane and tapioca.[90]
Thailand is the world's third-largest seafood exporter. Overall fish exports were worth
around US$3 billion in 2014, according to the Thai Frozen Foods Association.
Thailand's fishing industry employs more than 300,000 persons. [91]
In 1985, Thailand designated 25 percent of its land area for forest protection and 15
percent for timber production. Forests have been set aside for conservation and
recreation, and timber forests are available for the forestry industry. Between 1992 and
2001, exports of logs and sawn timber increased from 50,000 to 2,000,000 cubic meters
per year.
The regional avian-flu outbreak contracted Thailand's agricultural sector in 2004, and
the tsunami of 26 December devastated the Andaman Sea fishing industry. In 2005 and
2006, agricultural GDP was reported to have contracted by 10 percent. [92]
Thailand is the world's second-largest exporter of gypsum (after Canada), although
government policy limits gypsum exports to support prices. In 2003 Thailand produced
more than 40 different minerals, with an annual value of about US$740 million. In
September 2003, to encourage foreign investment in mining the government relaxed its
restrictions on mining by foreign companies and reduced mineral royalties owed to the
state.[92]
Industry and manufacturing[edit]
1,432,05
2012 2,453,717 1,021,665 490.134 3.97%
2
1,335,78
2013 2,457,086 1,121,303 512.186 3.97%
3
1,024,96
2018 2,167,694 1,142,733 594.809 n/a
1
Retail[edit]
Retail employs more than six million Thai workers. Most are employed by small
businesses. Large multinational and national retail players (such as Tesco Lotus, 7-
Eleven, Siam Makro, Big C, Villa Market, Central Group and Mall Group) are estimated
to employ fewer than 400,000 workers. This accounts for less than seven percent of
Thailand's total employment in retail.[93]: 70
Tourism[edit]
Main article: Tourism in Thailand
In 2016, tourism revenue, 2.53 trillion baht, accounted for 17.7 percent of Thailand's
GDP, up from 16.7 percent in 2015. It is expected to generate 2.71 trillion baht in 2017.
The global average for GDP contribution from tourism is nine percent. [99]
Cryptocurrencies
Thailand's Ministry of Finance approved four licensed brokers and dealers of
cryptocurrencies in the country: Bx, Bitkub, Coins and Satang Pro. The country still did
not elaborated regulation for ICOs, though it announced in late 2018 to loosen the rules.
[100]
Labour[edit]
See also: Thai labour law
Thailand's labour force has been estimated at from 36.8 million employed (of 55.6
million adults of working age)[101] to 38.3 million (1Q2016).[102] About 49 percent were
employed in agriculture, 37 percent in the service sector and 14 percent in industry. In
2005 women constituted 48 percent of the labour force, and held an increased share of
professional jobs. Thailand's unemployment rate was 0.9 percent as of 2014, down from
two percent in 2004.[43] A World Bank survey showed that 83.5 percent of the Thai
workforce is unskilled.[101]
A joint study by the Quality Learning Foundation (QLF), Dhurakij Pundit
University (DPU), and the World Bank suggests that 12 million Thais may lose their jobs
to automation over the next 20 years, wiping out one-third of the positions in the
workforce.[101] The World Bank estimates that Thai workers are two times and five times
less productive than Malaysian and Singaporean workers respectively. The report
assesses the average output of Thai workers at US$25,000 (879,200 baht) in 2014
compared to Malaysia's US$50,000 and US$122,000 for Singapore. [101] A 2016 report by
the International Labor Office (ILO) estimates that over 70 percent of Thai workers are
in danger of being displaced by automation.[93]: xviii Factories in Thailand are estimated to
be adding from 2,500–4,500 industrial robots per year. [103]: 18
In fiscal year 2015, 71,000 Thais worked abroad in foreign countries. Taiwan employed
the most Thai employees overall with 59,220 persons, followed by South Korea at
24,228, Israel at 23,479, Singapore at 20,000, and the UAE at 14,000. Most employees
work in metal production, agriculture, textile manufacturing, and electronic part
manufacturing fields.[104] As of 2020, Thai migrant labourers overseas generate
remittances worth 140 billion baht.[105]
The number of migrant workers in Thailand is unknown. The official number—1,339,834
registered migrant workers from Cambodia, Laos, and Myanmar—reported by the Office
of Foreign Workers Administration under the Ministry of Labour, represents only legal
migrant workers. Many more are presumed to be non-registered or illegal migrants.
The Thailand Development Research Institute (TDRI) estimates that there may yet be
more illegal migrant workers than legal ones in Thailand. [106]
Foreign trade[edit]
Thailand Exports by Product (2014) from Harvard Atlas of Economic Complexity
China has replaced the United States as Thailand's largest export market while the
latter still holds its position as its second-largest supplier (after Japan). While Thailand's
traditional major markets have been North America, Japan, and Europe, economic
recovery in Thailand's regional trading partners has helped Thai export growth.
Recovery from financial crisis depended heavily on increased exports to the rest
of Asia and the United States. Since 2005 the increase in export of automobiles from
Japanese manufacturers (particularly Toyota, Nissan and Isuzu) has helped improve
the trade balance, with over one million cars produced annually since then. Thailand
has joined the ranks of the world's top ten automobile-exporting nations. [107]
Machinery and parts, vehicles, integrated circuits, chemicals, crude oil,
fuels, iron and steel are among Thailand's principal imports. The increase in imports
reflects a need to fuel production of high-tech items and vehicles.
Thailand is a member of the World Trade Organization (WTO), the Cairns Group of
agricultural exporters and the ASEAN Free Trade Area (AFTA), and has pursued free-
trade agreements. A China-Thailand Free Trade Agreement (FTA) began in October
2003. This agreement was limited to agricultural products, with a more comprehensive
FTA planned to be signed by 2010. Thailand also has a limited free-trade agreement
with India (since 2003) and a comprehensive Australia-Thailand Free Trade Agreement,
which began on 1 January 2005.
Thailand began free trade negotiations with Japan in February 2004, and an in-principle
agreement was agreed to in September 2005. Negotiations for a US-Thailand free trade
agreement have been underway, with a fifth round of meetings held in November 2005.
Several industries are restricted to foreign investment by the 1999 Foreign Business
Act. These industries include media, agriculture, distribution of land, professional
services, tourism, hotels, and construction. Share ownership of companies engaged in
these activities must be limited to a 49 percent minority stake. The 1966 US-Thailand
Treaty of Amity and Economic Relations provides exemption of these restrictions for
shareholders with United States citizenship. [108]
The Bangkok area is one of the most prosperous parts of Thailand and heavily
dominates the national economy, with the infertile northeast being the poorest. A
concern of successive Thai governments, and a focus of the recently ousted Thaksin
government, has been to reduce the regional disparities which have been exacerbated
by rapid economic growth in Bangkok and financial crisis.
Although little economic investment reaches other parts of the country except for tourist
zones, the government has stimulated provincial economic growth in the eastern
seaboard and the Chiang Mai area. Despite talk of other regional development, these
three regions and other tourist zones still dominate the national economy.
Although some US rights holders report good cooperation with Thai enforcement
authorities (including the Royal Thai Police and Royal Thai Customs), Thailand
remained on the priority watch list in 2012. The United States is encouraged that
Thailand's government has affirmed its commitment to improving IPR protection and
enforcement, but more must be done for Thailand to be removed from the list. [109]
Although the economy has grown moderately since 1999, future performance depends
on continued reform of the financial sector, corporate-debt restructuring,
attracting foreign investment and increasing exports. Telecommunications,
roads, electricity generation and ports showed increasing strain during the period of
sustained economic growth. Thailand is experiencing a growing shortage of engineers
and skilled technical personnel.
Major Trade Partners[edit]
The following table shows the largest trading partners for Thailand in 2021 by total trade
value in billions of USD.[110]
Regional economies[edit]
Isan[edit]
Further information: Economy of Isan
The economy of Isan is dominated by agriculture, although output is poor and this
sector is decreasing in importance at the expense of trade and the service sector. Most
of the population is poor and badly educated. Many labourers have been driven
by poverty to seek work in other parts of Thailand or abroad.
Although Isan accounts for around a third of Thailand's population and a third of its
area, it produces only 8.9 percent of GDP. Its economy grew at 6.2 percent per annum
during the 1990s.
In 1995, 28 percent of the population was classed as below the poverty line, compared
to just 7 percent in central Thailand. In 2000, per capita income was 26,317 baht,
compared to 208,434 in Bangkok. Even within Isan, there is a rural/urban divide. In
1995, all of Thailand's ten poorest provinces were in Isan, the poorest being Sisaket.
However, most wealth and investment is concentrated in the four major cities
of Khorat, Ubon, Udon, and Khon Kaen. These four provinces account for 40 percent of
the region's population.
Special Economic Zones (SEZ)[edit]
In his televised national address on 23 January 2015 in the program "Return Happiness
to the People", Prime Minister Prayut Chan-o-cha addressed the government's policy on
the establishment of special economic zones.[111]
He said that the policy would promote connectivity and regional economic development
on a sustainable basis. There are currently 10 SEZs in Thailand, with trade and
investment valued at almost 800 billion baht a year.
In 2014, the government launched a pilot project to set up six special economic zones in
five provinces: Tak, Mukdahan, Sa Kaeo, Songkhla, and Trat. In the second phase,
which is expected to begin in 2016, seven special economic zones will be established in
another five provinces: Chiang Rai, Kanchanaburi, Nong Khai, Nakhon Phanom,
and Narathiwat.[111]
In early 2015, the government approved an infrastructure development plan in special
economic zones. In 2015, the plan includes 45 projects, budgeted at 2.6 billion baht.
Another 79 projects, worth 7.9 billion baht, will be carried out in 2016. Relying on a mix
of government revenue, bond sales, and other funding, Prayut plans to spend US$83
billion over seven years on new railways, roads, and customs posts to establish cross-
border trade routes. The idea is to link some 2.4 billion consumers in China and India
with Asia's newest economic grouping, the ASEAN Economic Community, of which
Thailand is a member.[112]
Critics of the SEZs maintain that free trade agreements and SEZs are incompatible with
the principles of the late-King Bhumibol's sufficiency economy,[113] claimed by the
government to be the inspiration for governmental economic and social policies. [114]
Shadow economy[edit]
"Thailand's shadow economy ranks globally among the highest," according to Friedrich
Schneider, an economist at Johannes Kepler University of Linz in Austria, author
of Hiding in the Shadows: The Growth of the Underground Economy.[115] He estimates
Thailand's shadow economy was 40.9 percent of real GDP in 2014,
including gambling and small weapons, but largely excluding drugs.[116] Schneider
defines the "shadow economy" as including all market-based legal production of goods
and services that are deliberately concealed from public authorities for the following
reasons: (1) to avoid payment of income, value added or other taxes, (2) to avoid
payment of social security contributions, (3) to avoid having to meet certain legal labor
market standards, such as minimum wages, maximum working hours, or safety
standards, and (4) to avoid complying with certain administrative procedures, such as
completing statistical questionnaires or other administrative forms. It does not deal with
typical underground, economic (classical crime) activities, which are all illegal actions
that fits the characteristics of classical crimes like burglary, robbery, or drug dealing.
[117]
The shadow economy also includes loan sharking. According to estimates, there are
about 200,000 "informal lenders" in the country, many of whom charge exorbitant
interest rates, creating an often insurmountable burden for low-income borrowers. [118]
See also[edit]
Stock Exchange of Thailand
Foreign aid to Thailand
Thailand and the International Monetary Fund
List of Thai provinces by GPP
Further reading[edit]
The economic history of Siam from the 16th to the 19th century, together with
factors affecting the economic outlook for the twentieth, are presented in Wright,
Arnold; et al. (2008) [1908]. Wright, Arnold; Breakspear, Oliver T (eds.). Twentieth
century impressions of Siam (PDF). London: Lloyds Greater Britain Publishing
Company. Retrieved 7 October 2011.
Porphant Ouyyanont. 2017. A Regional Economic History of Thailand. ISEAS–Yusof
Ishak Institute.
Pasuk Phongpaichit and Chris Baker. “A History of Thailand”. Cambridge University
Press.
Pasuk Phongpaichit and Chris Baker. “A History of Ayutthaya.”
Sompop Manarungsan. “Economic Development of Thailand: 1850-1950”
David Feeny. “Political Economy of Productivity”
Tomas Larsson. “Land and Loyalty.”
James Ingram. “Economic Change in Thailand: 1850-1970.”
William Skinner. “Chinese Society in Thailand: An Analytical History.” Cornell
University Press
Jessica Vechbanyongratana and Thanyaporn Chankrajang: “A Brief Economic
History of Land Rights in Thailand.”
Panarat Anamwathana and Jessica Vechbanyongratana. 2021. "The economic
history of Thailand: Old debates, recent advances, and future prospects."
Suehiro, Akira (1996). Capital Accumulation in Thailand 1855-1985. Chiang Mai:
Silkworm Books. ISBN 9789743900051. Retrieved 27 April 2020.
Hewison, Kevin (1989). Bankers and Bureaucrats Capital and the Role of the State
in Thailand (PDF). New Haven: Yale University Southeast Asia Studies. ISBN 0-
938692-41-0. Retrieved 27 April 2020.