Economy
From The Report: Thailand 2016
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Although buoyed by decades of steady expansion, Thailand – South-east Asia’s second-largest economy – saw growth falter in recent years in the wake of political unrest and challenging external conditions. However, falling global oil prices combined with stimulus packages benefited the economy and spurred a moderate recovery in 2015. The government is set to launch 20 infrastructure projects before 2018, covering rail, roads, air transport and ports, as part of an investment plan running until 2020. Public-private partnerships are expected to comprise 20% of the plan’s budget. Concerns about China and depressed commodities prices will continue to weigh on economic growth, although Thailand remains well positioned to manage these challenges, with robust international reserves and rising government spending expected to support and sustain recovery into 2017. This chapter contains a viewpoint from Veerathai Santipraphob, Governor, Bank of Thailand.

Articles from this Chapter

Overview

Bouncing back: The government is prioritising a return to strong growth rates after the recent slowdown
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Although buoyed by decades of steady expansion, Thailand – South-east Asia’s second-largest economy – saw growth falter in recent years in the wake of political unrest and challenging external conditions. However, falling global oil prices have benefitted the economy, which, combined with stimulus packages, led to a moderate recovery in 2015. Growth forecasts are positive for 2016, although the benefits of falling oil prices have been offset by a concurrent fall in commodities prices, while…

Viewpoint

Aiding the recovery: Veerathai Santipraphob, Governor, Bank of Thailand, on the resilience of the country’s banking system
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In line with the trend of regional currencies, the baht’s recent movement has been largely influenced by external factors. Any imminent signals of the US Federal Reserve’s initial interest rate hikes or worse-than-expected data coming out of China would prompt capital outflows from emerging markets, thereby weighing down their currency values. Furthermore, significant outflows could tighten financing conditions for domestic companies, in terms of both cost and availability of funds. This interplay…

Analysis

Stimulate to accumulate: A variety of measures are set to fuel growth in 2016
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An ambitious and far-reaching government stimulus package announced in late 2015 is targeting a return to the robust economic growth seen in the years following the Asian financial crisis. The government is encouraging lending across a host of segments and demographics, including small businesses and startups, an agricultural industry beset by falling commodities prices and low-income earners hoping to enter the property market. The projects aim to boost growth across nearly every sector of the…

Analysis

Back to the future: New minimum wage laws will return to a location-specific model
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The Thai government is implementing sweeping changes to its labour laws, with the minimum wage to change from a national rate to one dependent on the area, cost of living and localised economy. However, no provincial wages will be set lower than the current national minimum, and Thailand is currently recording some of the fastest wage growth in Asia, putting further pressure on its struggling exporters. National Minimum Wage In January 2013 the government implemented a uniform minimum wage of BT300…

Analysis

Home comforts: Restructuring the economy to reduce reliance on exports
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In the face of weakening global demand, a slowdown in China and falling export revenues, Thailand’s government is looking to improve its export competitiveness and further diversification, in addition to propping up its economy through promotion of domestic tourism and providing support for the agriculture sector. As part of its multi-pronged strategy, the government is also pushing the development of nine super clusters across the nation, which should spur investment in value-added industries,…