Thailand - Overview
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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%).
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
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%).
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.