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Thailand - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises

Introduction

Capital:: Bangkok
Area:: 513 km2
Total Population:: 66.785
Annual growth rate:: 0.00%
Density:: 131.00/km2
Urban population:: 34%
Population of Bangkok (11.970), Samut Prakan (390), Nonthanburi (300), Udon Thani (250), Nakhon Ratchasima (210)
Official language: Thai
Other languages spoken: English is a second language taught in most schools . However it may be difficult to find people able to speak English as only 28 % of the population reach the secondary level at school. Chinese is also often used.
Business language: Thai and English.
Ethnic Origins:: Although 75% of the population are classified as Thai, the country has a complex ethnic composition. The Thai themselves vary considerably, with those of the central plain differing markedly in culture and language from those of the north and northeast, known as the Lao. Many Thai have some Chinese ancestry, and Chinese constitute the largest single minority group in the country (14%).
Beliefs: 95% of Thais are Buddhists of the Theravada tradition. Muslims are the second largest religious group in Thailand at 4.5%. Thailand's southernmost provinces - Pattani, Yala, Narathiwat and part of Songkhla Chumphon have dominant Muslim populations, consisting of both ethnic Thai and Malay. Most often Muslims live in separate communities from non-Muslims.
Telephone codes:
To make a call from: 1
To make a call to: +66
Internet suffix:: .th
Type of State::
Thailand is a Kingdom. It is a constitutional monarchy based on parliamentary democracy.
Type of economy::
Lower-middle-income economy, Emerging Financial Market.
One of the most successful economies of South East Asia; economy based on the agri-food production, tourism, production of automotive and exports of electronic products

Economic overview

Thailand is the second largest economy (after Indonesia) and the 4th richest nation in Southeast Asia in terms of per capita GDP, after Singapore, Brunei and Malaysia and serves as an economic anchor for its developing neighbor countries. After recording a strong and dynamic growth in 2010, in the fall of 2011 the country suffered from the worst floods in half a century: the disaster struck its industrial heartland and agricultural sector and hindered economic growth.

After hovering near zero in 2011 (0.1%), growth rebounded in 2012 (5.6%) thanks to the reconstruction efforts. In 2013, it was lower than expected (1.9%), mainly because of the political turmoil in the country towards the end of the year. It is expected to strenghten in 2014 (3-4%). The main drivers of the economy are public investments, particularly in basic infrastructure, export promotion and support for tourism projects.

The year 2013 was again marked by political conflict, with anti-government protests seeking to push for the resignation of Prime Minister Yingluck Shinawatra, the sister of the former Prime Minister Thaksin, who had been accused of corruption and remains in exile in Dubai. This has created pressure on tourism, private sector investment, state budgetary expenditure and the confidence index of domestic consumers.

The 2014 budget continues in the line of fiscal discipline; its objective is to reduce the budget deficit to 2 % of GDP. It aims to set national strategies for Thailand and prepare the country for the creation of The ASEAN Community, as well as resolve recurring economic and social problems. The government has established four national strategies to move the country forward: growth and competitiveness, inclusive growth, green growth, and good governance. In preparation for the ASEAN Community launch in 2015, the government strives to improve the quality of education and develop language skills and stimulate the use of foreign labor to prepare for the future changes both inside and outside the country. Infrastructure development is also a priority. To cope with the problem of competitiveness, the country should invest in R&D and education. It also needs to address critical issues such as the role of the monarchy, the role of the army, the independence of the judiciary and the treason laws which are considered disproportionate and draconian.

Significant progress has been made in terms of development and poverty has declined over the last few decades. Despite the country undergoing a crisis, unemployment rate remains low (0.7%). 

Main industries

The Thai economy is heavily based on agriculture, which contributes around 10% of the GDP and employs more than 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 over 40% 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 to 46.5% of the GDP.

Foreign trade overview

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 145% of the GDP for 2010-2012) 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's trade deficit deepened in 2013: from 20.75 billion USD in 2012 to 22.9 billion USD in 2013. This was an effect of a drop in exports (0.31) and a rise in imports (0.29%).

FDI

Foreign direct investment has been an important element of Thailand's economic development process. The immense foreign currency influx after Thailand's financial liberalization in 1990, helped to increase the country's competitiveness. In the context of the recession and relatively slow recovery after the 1997 crisis, the FDI's role became even more crucial in helping re-capitalize failing industries, bring in new technologies, generate or save jobs, assist with policy reforms and play a role in addressing the poverty and social inequalities challenges.

Thailand is an important FDI destination. In terms of investment, the country offers an attractive and modern legal framework and its economy benefits from the regional dynamism. According to the UNCTAD World Investment Report 2013, Thailand was among the 8 priority destinations for foreign investment for the period 2013-2015, gaining 4 places on the previous year. It is the 7th largest FDI recipient in East and South-East Asia. After having slowed down in 2009, FDI flows remained significant despite natural disasters and the revealed weaknesses of the management and supply systems. In 2013, FDI increased only slightly compared to 2012, but still exceeded official forecasts - a further proof of investor confidence.
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