Thailand Economy

By | September 26, 2021

Business

Thailand is leading a second generation of so-called tiger countries which, with low wage and ancillary wage costs and a talent for innovation, significantly increase the competitive pressure on the world market. Supported by the appreciation of the Japanese yen and the increasing relocation of labor-intensive production from East to Southeast Asia, an unprecedented economic boom began in 1987/88. Until 1997 Thailand was one of the most dynamic economies in the world (annual growth in gross domestic product [GDP] of 8.9%). In 1997, the debt crisis and the release of the Thai currency forced the country to take out millions of loans from the IMF, which was accompanied by far-reaching structural reforms. Thailand is now one of the middle-income developing countries. Annual economic growth in per capita income was 4.1% in 2018.

Foreign trade: Thailand’s foreign trade balance has been positive since 2015 thanks to import substitution (export value 2016: US $ 215.4 billion; import value: US $ 194.2 billion). The main import goods are electronic products, machinery and automotive parts, petroleum and chemical products. On the export side, motor vehicles and motor vehicle parts, electronic products and chemical products dominate. The most important supplier countries are China, Japan, the USA and Malaysia; The main customer countries are the USA, China and Japan.

Agriculture

The agricultural sector generated (2017) a GDP share of 8.7% and employs 33% of the workforce. A third of the country’s area is used as arable land, and permanent crops are grown on 2%. Small and small businesses predominate alongside large plantations, some of which are foreign. With a harvest of (2017) 33.4 million t, rice is an important cultivated product and the most important agricultural export item. For natural rubber , Thailand ranks first worldwide with a yield of 4.6 million t; in the case of pineapples , with a harvest of 2.1 million t, it has a world market share of almost 12%.

Other important products of the very wide range of agricultural production are cassava , sugar cane , mangoes , oil palm fruits , bananas and other tropical fruits. The importance of animal husbandry has increased significantly. Water buffalo and humpback cattle (2017: 5.7 million) are mainly needed as draft animals to work the rice fields. Pigs, sheep and poultry are used for self-sufficiency with meat and are partly exported.

Forestry: The deforestation of vast forests in the past has caused severe ecological damage. Despite an absolute commercial logging ban imposed in 1989 and the reforestation programs, the forest stands are only slowly recovering (forested area: 16.5 million hectares).

Fisheries: Fisheries have traditionally played an important role in Thailand. The catch amount (2015) is 2.6 million t. In recent years, aquaculture breeding  - mainly shrimp – has grown in importance (2015 production volume: 0.9 million t).

Industry

The industrial development of Thailand was promoted from 1961 on by labor-intensive production and import substitution (food, beverages, tobacco), whereby Thailand profited from the high world market raw material prices. When the internal market reached its limits in the 1970s, industrial policy shifted to the development of export-oriented industries, which went hand in hand with increased use of capital, new technologies and increasing product diversification. In the manufacturing industry (2017) 23% of employees find work; the share of GDP rose from (1980) 22.5% to (2017) 35%. In addition to the manufacturing industry, the construction industry is important for economic growth. The most important sectors are the automotive industry, the electrical and electronics industry (especially semiconductors), the textile, Plastic and food industries as well as petrochemicals. The industrial center of the country is the greater Bangkok area.

Natural resources: Thailand has a large number of mineral resources, but these are increasingly depleted. The most important are lignite, gypsum, zinc ore, iron ore and fluorite. Thailand also has extensive natural gas reserves (output 2017: 38.7 billion m 3) and oil deposits (16.8 million t).

Energy industry: Thailand’s energy needs are now mainly covered by imports from neighboring countries. The expansion of hydropower and coal-fired power plants is being driven forward in their own country. The use of renewable energies (especially solar and wind energy) is also being expanded.

Service

The share of the service sector in the economy as a whole has remained almost the same since the 1990s. Services contribute 56.3% of GDP (2017) and employ 45% of the workforce. Important sectors are trade, tourism, transport, finance and public services.

Tourism: Tourism is one of the most important sources of foreign currency. Since 1970 the number of foreign visitors has increased from 630,000 to 35.6 million (2017). This positive trend was also not affected by temporary setbacks (tsunami disaster 2004; SARS and bird flu epidemic 2006/07; floods in 2011; domestic political unrest in 2008, 2010, 2013; coup 2014). Thailand is now primarily focusing on the expansion of high-quality tourism offers (medical and wellness holidays). This tries to be less associated with sex tourism and child prostitution. More than half of the visitors come from Asia (Malaysia, China, Japan and South Korea), a quarter from Europe (Great Britain, Russia, Germany, France). Tourist centers include Bangkok and Chiang Mai , historical sites (e.g. the temples in Sukhothai and Ayutthaya) and seaside resorts on the islands of Phuket and Samui. Check petwithsupplies to see Thailand Travel Guide.

Transportation

Thailand’s transport network is strongly oriented from north to south and towards the greater Bangkok area; East-west connections within the country are insufficiently developed. The peripheral border and mountain areas are poorly developed. The domestic transport of people and goods is largely dependent on the road. The railroad, like the waterways, is rarely used as a means of transport. The most important international rail link is the Bangkok – Kuala Lumpur – Singapore route. The two most important deep-sea ports are Khlong Toey in Bangkok and Laem Chabang near Pattaya. Suvarnabhumi International Airport, Bangkok’s new international airport, opened in 2006. It is one of the most important transport hubs in Southeast Asia and is served by over 80 airlines; In 2017, 60.9 million passengers were counted.

Thailand Economy