Thailand Economic Structure

By: EconomyWatch Content   Date: 31 March 2010

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Thailand is one of the tiger economies in the 1980s which went through rapid economic growth, averaging growth rates of 10.4 percent from 1985 to 1996. However, growth slowed when the country suffered heavily in the 1997 currency crisis. 
The country's economy regained to its positive growth rates after 4 years, in 2001.

In 2001, when businessman Thaksin Shinawatra took office, he introduced a set of economic policies, widely known as Thaksinomics, to increase domestic activity and cut down the country's reliance on foreign trade and investment. During his years in office, the country recorded positive GDP growth rates of between 4.6 to 7.14 percent from 2002 to 2005, before he was ousted in a military coup in 2006.

Thailand's polarized political situation after 2006 threatened economic growth and major industries such as tourism shrank in the midst of frequent protests in the country. Thailand faced a drought of foreign direct investment when consumer and investor confidence decline due to political conflicts.

The Thai economy stabilizes when Abhisit Vejjajiva took office on 2008. At the time of the global economic turmoil, the Abhisit administration introduced two stimulus packages worth $43.4 billion in order to offset weak external demand and improve confidence. Following the introduction of these packages, the Thai's economy recovered from a negative GDP growth of -2.33 percent in 2009 to positive 7.8 percent GDP growth in 2010.

The Thai government welcomes foreign investment and investors willing to meet certain requirements. In order to attract more foreign investment, the government is ready to offer expansion in investment opportunities, especially on green technology/manufacturers. Thailand is a member of World Trade Organization (WTO), Asia-Pacific Economic Cooperation, IOR-ARC and ASEAN.

Economic Geography

Thailand is located in the Southeastern part of Asia, with a total area of 513,120 square km. 27.4 percent of its land is arable, which allows the country to be a major exporter of many agricultural products to many countries.
Thailand is also a country with rich deposits of natural resources such as tin, rubber, natural gas, tungsten, gypsum and lignite. It is currently one of the world's largest exporter of rice.

Population & Labour Force

Thailand has a population of 66 million and a labour force of 38.7 million people. The unemployment rate in 2010 is low at 1.04% and this makes them the third country in the world with the lowest unemployment rate.

The country is among one of the top nations to record high rate of HIV/AIDS cases, mostly due to the thriving sex industry. The government did not provide sufficient protection and coverage for its sex workers, and this also led to corrupt authorities exploiting the sex-workers.

Industry Sectors

In 2010, industry contributes 45.6 percent to the country's GDP and employs 19.7 percent of the total workforce. One of its most important industries is the automobile, which grew by 64 percent in 2010, with 1.6 million cars produced. This made Thailand the 13th largest motor vehicle manufacturing countries in the world. At its current growth rate, the country is estimated to be one of the top 10 motor vehicle manufacturing countries in the world by 2015.

Electronics is also one of the largest industries in Thailand. An increasing global demand for high-technology consumer electronics such as wireless devices, mobile phones and computers, Thailand has become the favorable place for electronics industry investment. However, its lucrative industry faces competition from neighboring Malaysia and Singapore.

Services contributes 44 percent to Thailand's GDP and employs 37.9 percent of the total workforce in 2010. Tourism is one of the most important industry that to the country's services.

Tourism in Thailand contributes a larger share of GDP than any other country in Asia. Thailand's capital city, Bangkok attracted large number of visitors every year. In 2011, Bangkok is named by influential US travel magazine Travel + Leisure as the world's best city. According to Thailand's Department of Tourism, the country welcomed 10.35 million visitors, and collected a total of US$19.76 billion in international tourism receipts.

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