Thailand is the geographical heart of South-East Asia. The infamous golden triangle, located at

the nation's northernmost point, is where Thailand's borders meet those of both Laos and

Myanmar (Burma). The border with Myanmar continues to the west and then south as far as the

Malay peninsula, much of which is occupied by Thailand. On the east, the border with Laos

meanders southeast along the Mekong River until it reaches Cambodia, which is due east of

Bangkok, the Thai Capital. In the south is the Gulf of Thailand. Roughly the size of France

(200,000 sq. miles), Thailand is composed of four main regions. The northern mountainous

region contains numerous ruins and temples, the ancient city of Chieng Mai, and Thailand's

highest peak, Doi Inthanon. This region is also home to the hill tribes of Thailand, distinct ethnic

groups which settled in the area thousands of years ago after migrating from as far away as Tibet

and central China. The north-east of Thailand occupies the semi-arid Korat plateau, the most

desolate and least-visited part of the country. An interesting blend of Thai, Lao, and Khmer

influences characterise the culture of the Korat. Central Thailand, which consists of the fertile

plains surrounding the Chao Phraya River, is the country's most populous region and its rice

basket. Thailand's alluring and congested capital city of Bangkok is located along the banks of

the Chao Phraya, near the river's outlet into the Bight of Bangkok and the Gulf of Thailand. The

southern region of Thailand, which stretches for hundreds of miles along the Malay peninsula,

abounds with stunning beaches and scores of tropical islands.

Thailand can be an extremely hot and soggy place. Its tropical climate is divided into three

seasons: cool in November to February, hot in March to May, and rainy in June to October. The

seasons are more extreme in the northern regions, where the dry heat can grow quite intense in

late spring and the cool can become cold in the mountains. The rainy season is no detriment to

travel in Thailand, as the rains can be cool and refreshing.1

1 http://www.geographia.com/thailand/

1. Economic Snapshot (Latest figures/percentage for)

a. Form of government

The Government of Thailand, or formally the Royal Thai Government (RTG), is theunitary

government of the Kingdom of Thailand. The country emerged as a modern nation state after the

foundation of the Chakri Dynasty and the city of Bangkok in 1782. The Revolution of

1932 brought an end to absolute monarchy and replaced it with a system of constitutional

monarchy. From then on the country was ruled by a succession of military leaders installed after

coups d’etat, the most recent in May 2014, and a few democratic parentheses. The 2007

Constitution (drafted by a military-appointed council, but approved by a referendum) was

eventually annulled by the 2014 coup-makers who run the country as a military dictatorship.

Thailand has so far had seventeen Constitutions; however the basic structure of government has

remained the same. The Government of Thailand is made up of three branches: the executive, the

legislative, and the judiciary, the system of government is modelled after the Westminster

system. All branches of the government are located within Bangkok, the capital city of Thailand.

Since May 2014 Thailand has been ruled by a military junta, the National Council for Peace and

Order, which has partially repealed the 2007 constitution, declared martial law and nationwide

curfew, banned political gatherings, arrested and detained politicians and anti-coup activists,

imposed internet censorship and taken control of the media.2

b. GDP

The gross domestic product (GDP) in Thailand was worth 373.80 billion in 2014.

The GDP value of Thailand represents 0.60 percent of the economy. GDP in

Thailand averged 101.35 USD billion from 1960 until 2014, reaching an all time

2 Damrong Rajanubhab. (1927). Thai Government in Ancient Times.. (in Thai). Bangkok: Fine Arts

Department.

of 378.25 USD billion in 2013 and a record low of 2.76 USD billion in 1960.

GDP in Thailand is reported by the world bank group.

Thailand’s economic growth slowed in the second quarter as improving government spending

and tourism failed to counter weak local demand and exports, with the outlook clouded by

drought and the yuan’s devaluation.

Gross domestic product gained 2.8 percent in the three months through June from a year earlier,

the National Economic and Social Development Board said in Bangkok Monday. That matched

the median estimate in a Bloomberg survey, and compares with 3 percent in the previous period.

GDP grew 0.4 percent from the previous quarter.3

c. Population

Thailand Population in 2015

The last official national census was carried out in Thailand back in 2010 and the country’s

official population was declared at 65,479,453. Current estimates show a 2014 population in

Thailand of 67.2 million, up slightly from 2013’s estimate of 67.1 million, making it the 20th

most populous country on earth (a downgrade from its position as number 19 just two years ago).

Thailand Population 2014

Despite the official figures, the Thai Ministry of Foreign Affairs suggests that with unregistered

individuals added to the final total, the Thailand population in 2014 is actually nearer 70 million.

It's estimated there are 2.2 million illegal and legal migrants in Thailand, including many

expatriates from developed countries like the United States. Until very recently, the numbers

were growing at a far greater rate, but it’s claimed that the government-funded family planning

program has raised awareness and led to a dramatic fall in birth figures. In 1960, the population

growth was at its height with figures of around 3.1% but this has fallen to around 0.4% today.4

3 http://www.bloomberg.com/news/articles/2015-08-17/thai-gdp-growth-slowed-last-quarter-with-yuan-denting-outlook4 http://worldpopulationreview.com/countries/thailand-population/

d. Unemployment

Unemployment rate in Thailand decreased to 0.97 persetn in august form 1 percent in july 2015.

Unemployment rate in Thailand averged 1.15 percent from 2001 until 2015, reaching an all time

high of 5.73 percent January of 2001 and a record low of 0.39 percent in November of 2012.

Unemployment rate in Thailand is reported by the bank of Thailand.

0.56 percent. That's Thailand's official unemployment rate as of end-2014. It's among the lowest

in the world, and compares with 9.4 percent in India and 6 percent in the Philippines in the

region.

This is not a recent phenomenon: Thailand's jobless rate has held below 1 percent for the most

part since 2011. The record high was 5.73 percent in Jan. 2001, when the National Statistical

Office first began releasing the data every month. How did it get so low?

"Our unemployment rate has been low not because of a different definition from other countries,

but because of structural problems,'' said Bank of Thailand spokesman Chirathep Senivongs Na

Ayudhya. "The agricultural sector absorbs laborers and those who can't find work can always

look for jobs in the informal sector or do something on their own.''5

e. Country rating

Country rating of Thailand is stable that is BBB+

Moody's conclusions were contained in its just-released credit analysis, titled "Thailand,

Government of" and which examines the sovereign in four categories: economic strength, which

is assessed as "high"; institutional strength "high (-)"; fiscal strength "very high (+)"; and

susceptibility to event risk "moderate (+)".

5 http://www.bloomberg.com/news/articles/2015-02-02/thailand-s-unemployment-rate-is-a-ridiculously-low-0-6-here-s-why

f. Ease of doing Business

A new World Bank Group report finds that Thailand further improved its business environment

over the past year. The country continues to rank among the top 30 economies worldwide and

second among emerging economies of East Asia on the ease of doing business.

Thailand’s standing in the ease of doing business ranking improved from 28th in last

year’s Doing Business report to 26th in this year’s report. The report finds that Thailand ranks

among the top 30 economies in the world in five areas: dealing with construction permits (at 6th

in the global ranking), getting electricity (12th), protecting minority investors (25th), enforcing

contracts (25th), and registering property (28th). And the report recognizes that in 2013/14,

Thailand made dealing with construction permits less time-consuming by introducing a fast-track

approval process for building permits for smaller buildings. This has benefited local

entrepreneurs, who now have fewer regulatory hurdles to deal with and more resources to focus

on their business,” said Ulrich Zachau, Country Director for Thailand, World Bank

Group. “Thailand has also used technology to improve the regulatory environment for

businesses. For example, the use of electronic systems has reduced both the number of

documents and the time needed for exporting and importing by almost half since 2007.”6

g. Human Development Index

As successive Human Development Reports have shown, most people in most countries have

been doing steadily better in human development. Advances in technology, education and

incomes hold ever-greater promise for longer, healthier, more secure lives.1 Globalization has on

balance produced major human development gains, especially in many countries of the South.

6 http://www.worldbank.org/en/news/press-release/2014/10/29/thailand-further-improves-the-ease-of-doing-business-wbg-report-ranks-country-among-top-30-economies-worldwide

But there is also a widespread sense of precariousness in the world today—in livelihoods, in

personal security, in the environment and in global politics.2 High achievements on critical

aspects of human development, such as health and nutrition, can quickly be undermined by a

natural disaster or economic slump. Theft and assault can leave people physically and

psychologically impoverished. Corruption and unresponsive state institutions can leave those in

need of assistance without recourse. Political threats, community tensions, violent conflict,

neglect of public health, environmental damages, crime and discrimination all add to individual

and community vulnerability.7

h. Gini Coefficient

Gini index measures the extent to which the distribution of income (or, in some cases,

consumption expenditure) among individuals or households within an economy deviates from a

perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income

received against the cumulative number of recipients, starting with the poorest individual or

household. The Gini index measures the area between the Lorenz curve and a hypothetical line

of absolute equality, expressed as a percentage of the maximum area under the line. Thus a Gini

index of 0 represents perfect equality, while an index of 100 implies perfect inequality. In 2000-

2004 gini coefficient of Thailand was 39.4.8

i. Ranking by size and population

Thailand is the 51st largest country on earth in terms of total area, but 20th in

terms of population. Thailand is 88th in terms of population density, with 132.1

people per square kilometer (342/square mile), based on the 2011 population

figures. While the country's population is spread fairly well, a substantial amount

of people live in Bangkokand the surrounding Bangkok Metropolitan

Region. Bangkok, located in Central Thailand, has a population of more than 8

million, or close to 13% of the country's population. More than 14 million (or

7 http://www.th.undp.org/content/thailand/en/home/library/human_development/Human_Development_Report_2014.html8 http://data.worldbank.org/indicator/SI.POV.GINI

22.2% of the total population) live in the Bangkok Metropolitan Region. This

means Bangkok is much larger than any other urban areas in Thailand. 9

2. Economic history

Thailand, formerly known as Siam, opened to foreign contact in the pre-industrial era.

Despite the scarcity of resources in Siam, coastal ports and cities and those at the river

mouth were early economic centers which welcomed merchants from Persia, the Arab

countries, India, and China. The rise of Ayutthaya during the 14th century was connected

to renewed Chinese commercial activity, and the kingdom became one of the most

prosperous trade centers in Asia. When the capital of the kingdom moved to Bangkok

during the 19th century, foreign trade (particularly with China) became the focus of the

government. Chinese merchants came to trade; some settled in the country and received

official positions. A number of Chinese merchants and migrants became high dignitaries

in the court.

From the mid-19th century onward, European merchants were increasingly active. The

Bowring Treaty, signed in 1855, guaranteed the privileges of British traders. The Harris

Treaty of 1856, which updated the Roberts Treaty of 1833, extended the same guarantees

to American traders. The domestic market developed slowly, with serfdom a possible

cause of domestic stagnation. Most of the male population in Siam was in the service of

court officials, while their wives and daughters may have traded on a small scale in local

markets. Those who were heavily indebted might sell themselves as slaves. King Rama V

abolished serfdom and slavery in 1901 and 1905 respectively.

From the early 20th century to the end of World War II, Siam's economy gradually

became globalized. Major entrepreneurs were ethnic Chinese who became Siamese

nationals. Exports of agricultural products (especially rice) were very important and

Thailand has been among the top rice exporters in the world. The Siamese economy

suffered greatly from the Great Depression, a cause of the Siamese revolution of 1932.10

9 http://worldpopulationreview.com/countries/thailand-population/10 The Thai Economic Problems After the Second World War and the Government Strategies in Dealing with Them. Silpakorn University. Retrieved 25 Aug 2012.

3. GDP

a. GDP- Nominal

Thailand nominal GDP data is available in CEIC's Global Database, and is updated regularly to

give you a complete picture of both Thailand's GDP data and Asia GDP Data. Most recently, on

December 01, 2014, Thailand nominal GDP was 404,836 USD Mn. The nominal GDP decreased

from 420,400 US Mn reported on December 01, 2013. The Global Database also includes

detailed breakdown's of Thailand GDP data, additionally WorldTrend houses normalized real

GDP growth data to allow you to accurately compare GDP growth rates within Asia and

globally.

b. GDP- PPP

GDP per capita based on purchasing power parity (PPP). PPP GDP is gross domestic product

converted to international dollars using purchasing power parity rates. An international dollar has

the same purchasing power over GDP as the U.S. dollar has in the United States. GDP at

purchaser's prices is the sum of gross value added by all resident producers in the economy plus

any product taxes and minus any subsidies not included in the value of the products. It is

calculated without making deductions for depreciation of fabricated assets or for depletion and

degradation of natural resources. Data are in current international dollars based on the 2011 ICP

round.

c. GDP Rank

The Gross Domestic Product (GDP) in Thailand expanded 0.40 percent in the second quarter of

2015 over the previous quarter. GDP Growth Rate in Thailand averaged 0.94 percent from 1993

until 2015, reaching an all time high of 9.60 percent in the first quarter of 2012 and a record low

of -6.30 percent in the fourth quarter of 2011. GDP Growth Rate in Thailand is reported by the

Nesdb, Thailand.

from 2000 to 2011, Thai economy grew at an average of 1.1 percent quarter-on-quarter, boosted

by industrial and agricultural exports and to lesser extend by domestic consumption. Yet, as

exports have been weakening throughout 2012 and 2013 due to several external economic

shocks, domestic and public consumption has become the main source of expansion.

d. GDP Growth(trend for the last few decades)

GDP growth of thailand has increased and decreased in few decades. Till 1980-85

GDP has been constant to 4.6 and it has increased in year 1990 to 11.6 and it

again fell countinosly and even this led to global financial crisis in the year

between 2007-12 its GDP was -2.3 . but then it increased and in 2012 it was 6.5.

e. GDP Per Capita

Thai economy grew by 0.4 percent on a quarter-on-quarter seasonally adjusted basis in the

second quarter of 2015, accelerating from a 0.3 percent expansion in the previous quarter and

beating market consensus. An increase in private consumption and a rebound in government

spending offset a decline in investment and exports. 

In the second quarter of 2015, private consumption grew by 1.0 percent, accelerating from a 0.7

percent expansion in the preceding quarter. Government spending expanded 3.0 percent,

following a 0.5 percent contraction in the March quarter. Gross fixed capital formation dropped

by 1.0 percent, after registering a 3.9 percent fall in the previous quarter. Exports dropped 1.0

percent, as compared to a 3.9 percent contraction in the first quarter. Imports fell 2.2 percent,

following a 0.6 percent drop in the previous quarter.

On the production side, agriculture declined by 1.0 percent, following a 1.5 percent contraction

in the March quarter. Manufacturing dropped 1.8 percent, as compared to a 0.5 percent decline in

the preceding quarter. Wholesale and retail trade, repairing expanded by 0.3 percent, slowing

from a 0.8 percent growth and financial intermediation grew 2.0 percent, after registering a 2.3

percent expansion in the March quarter.

Year-on-year, the GDP advanced 2.8 percent, slowing from a 3.0 percent  expansion in the

March quarter. For 2015, the Thailand's economic planning agency (NESDB) projected GDP

growth to be between 2.7 percent to 3.2 percent, from an earlier estimates of  3.0 percent to 4.0

percent. 

4. GDP – Composition by sector of origin

a. Sector wise contribution to GDP of the top 5 sectors with the reason

The distribution gives the percentage contribution ofagriculture, industry, and services to

total GDP, and will total 100 percent of GDP if the data are complete. Agriculture

includes farming, fishing, and forestry. Industry includes mining, manufacturing, energy

production, and construction. Services cover government activities, communications,

transportation, finance, and all other private economic activities that do not produce

material goods.

Agriculture: 11.6%

Industry: 32.6%

Services: 55.8% (2014 est.)11

5. GDP – Composition by sector of origin

This entry is derived from Economy > GDP > Composition, by sector of origin, which shows

where production takes place in an economy. The distribution gives the percentage contribution

of agriculture, industry, and services to total GDP, and will total 100 percent of GDP if the data

11 https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html

are complete. Agriculture includes farming, fishing, and forestry. Industry includes mining,

manufacturing, energy production, and construction. Services cover government activities,

communications, transportation, finance, and all other private economic activities that do not

produce material goods.

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment

policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2008 -

averaging more than 4% per year - as it recovered from the Asian financial crisis of 1997-98.

Thai exports - mostly machinery and electronic components, agricultural commodities, and

jewelry - continue to drive the economy, accounting for more than half of GDP. The global

financial crisis of 2008-09 severely cut Thailand's exports, with most sectors experiencing

double-digit drops. In 2009, the economy contracted 2.2%. In 2010, Thailand's economy

expanded 7.6%, its fastest pace since 1995, as exports rebounded from their depressed 2009

level. Antigovernment protests during March-May and the country's polarized political situation

had - at most - a temporary impact on business and consumer confidence. Although tourism was

hit hard during the protests, its quick recovery helped boost consumer confidence to new highs.

Moreover, business and investor sentiment remained buoyant as Thailand's stock market grew

almost 5% during the three-month period. The economy probably will continue to experience

high grow well into 2011.12

b. Main goods/products in each sector

With a well-developed infrastructure, a free-enterprise economy, and generally pro-

investment policies Thailand has historically had a strong economy due in part to

competitive industrial and agriculture exports - mostly electronics, agricultural

commodities, automobiles and parts, and processed foods. The economy

experienced slow growth and declining exports in 2014, in part due to domestic

political turmoil and sluggish global demand. With full employment, Thailand

attracts an estimated 2-4 million migrant workers from neighboring countries, and

faces labor shortages. Following the May 2014 coup dtat, tourism decreased 6-7%

12 http://www.nationmaster.com/country-info/profiles/Thailand/Economy

but is beginning to recover. The household debt to GDP ratio is over 80%. The Thai

government in 2013 implemented a nation-wide 300 baht ($10) per day minimum

wage policy and deployed new tax reforms designed to lower rates on middle-

income earners. The Thai baht has remained stable. 13

c. Inflation and interest rate

Thailand - Inflation

Consumer prices record faster annual drop in August

In August, consumer prices fell 0.23% over the previous month, which followed the 0.07%

decrease seen in July and marked a seven-month low. According to the Ministry of Commerce,

August’s fall mainly resulted from lower prices for transportation and communication as well as

forenergy.

Consumer prices in August fell 1.2% over the same month last year. The figure was below July’s

1.0% drop and marked the fastest fall in three months. Inflation is well below the Central Bank’s

tolerance margin of plus/minus 1.5 percentage points around its target of 2.5%. Core consumer

prices, which exclude prices for energy and fresh food, rose 0.03% over the previous month

(July: +0.10% month-on-month). Core inflation in August was stable at July’s 0.9%.

a. Trend over past 5 years

The Bank of Thailand projects that inflation will average 2.1% in 2015. FocusEconomics

Consensus Forecast panelists expect inflation to average 2.1% in 2015, which is down 0.2

13 https://www.cia.gov/library/publications/the-world-factbook/fields/2116.html

percentage points from last month’s Consensus. For 2016, panelists see average inflation at

2.5%.14

Thailand - Inflation Data

2010   2011   2012   2013   2014  

Inflation Rate (CPI, annual variation in %) 3.3   3.8   3.0   2.2   1.9  

d. Population and unemployment

a. Trends for the last few decades

Population and unemployment of thailand since five years:-

e.

This table shows the unemploment and population of thailand and population is been

increasing and unemployment is decreasing which is good thing for the people and

economy of thailand.

14 https://www.focus-economics.com/country-indicator/thailand/inflation

Years 2010 2011 2012 2013 2014

Population 66,402,31

6

66,576,332 66,785,00

1

67,010,502 67,222,972

Unemployment 1.5 1.2 0.7 0.7 0.7

8.Fiscal Health

a. Fiscal deficit/surplus (trend over last decade)

Thailand recorded a Government Budget deficit equal to 2.50 percent of the

country's Gross Domestic Product in 2014. Government Budget in Thailand

averaged -1.09 percent of GDP from 2003 until 2014, reaching an all time high of

2.50 percent of GDP in 2005 and a record low of -4.80 percent of GDP in 2009.

Government Budget in Thailand is reported by the Ministry of Finance, Thailand.

Government Budget is an itemized accounting of the payments received by government (taxes

and other fees) and the payments made by government (purchases and transfer payments). A

budget deficit occurs when an government spends more money than it takes in. The opposite of a

budget deficit is a budget surplus. This page provides - Thailand Government Budget - actual

values, historical data, forecast, chart, statistics, economic calendar and news. Content for -

Thailand Government Budget - was last refreshed on Saturday, October 3, 2015. 15

b. Current Account Deficit/Surplus (trend over last decade)

Thailand recorded a Current Account surplus of 2650 USD Million in August of 2015. Current

Account in Thailand averaged 248.54 USD Million from 1991 until 2015, reaching an all time

high of 5146.60 USD Million in December of 2014 and a record low of -4164.87 USD Million in

April of 2013. Current Account in Thailand is reported by the Bank of Thailand.

Current Account is the sum of the balance of trade (exports minus imports of goods and

services), net factor income (such as interest and dividends) and net transfer payments (such as

foreign aid). This page provides the latest reported value for - Thailand Current Account - plus

previous releases, historical high and low, short-term forecast and long-term prediction,

15 http://www.tradingeconomics.com/thailand/government-budget

economic calendar, survey consensus and news. Content for - Thailand Current Account - was

last refreshed on Saturday, October 3, 2015. 

f. Currency

a. Currency crisis (if any)

There was currency crisis in Thailand and in early 1990s Thailand has short term interest rate

and people wanted to invest more because of its high exchange rate. People thought of borrowing

money in US dollar and invested in Thai Bhatt to get more interest. As exchange rate of US was

7% and Thailand was 11%. And because of the devaluation all the people and lenders wanted to

pull as there was massive devaluation in currency of Thailand and debts got doubled and the

banks ran out of business and the financial system got collapsed.16

b. Trend of the currency vs USD over the last few decades

Historical Thailand Baht Rate (THB USD)

Year THB/USD Year THB/USD Year THB/USD Year THB/USD

16 https://www.khanacademy.org/economics-finance-domain/macroeconomics/forex-trade-topic/currency-reserves/v/financial-crisis-in-thailand-caused-by-speculative-attack

198119821983198419851986198719881989

21.8223.0122.9923.6627.2026.3225.7625.3125.72

199019911992199319941995199619971998

25.6125.5325.4225.3325.1624.9325.3631.0741.32

199920002001200220032004200520062007

37.8840.2244.5143.0341.5640.2740.2537.8832.21

200820092010201120122013

32.9734.3131.7030.4731.0530.70

The Thailand Baht exchange rate for August, 2014 averaged 32.03 THB to 

USD. That's 5.9 basis points lower than the July, 2014 rate of 32.09, and 46 

basis points higher than the August, 2013 rate of 31.56.  The minor movement  in the THB/USD

exchange rate from July to August provides evidence that the short term trend in THB/USD is

relatively flat. If that trend continues in the 

currency market, we should see an average daily rate in September, 2014 that 

is close to 31.97.

The average Thailand Baht conversion rate over the last 12 months was 32.18. 

The average rate over the last 10 years was 33.67. The minimal change in the 

Thailand Bahts to dollars exchange rate over the last 12 months compared to 

average conversion rates over the last 10 years serve as an indicator that the 

long term trend in THB/USD is relatively flat.

The highest currency rate for THB/USD over the last 12 months was 32.93. The

lowest was 31.19. The market high was attained in January, 2014. The market 

low was achieved in October, 2013.

Forecast-Chart.com's historical research covers Thailand Baht data back to 

January, 1981. The average exchange value during that period of history was 

30.95 THB/USD. The highest rate was 52.98. The lowest was 20.55.  The 

market high was attained in January, of 1998. The market low was achieved in 

March of 1981. Recent rates experienced in August of 2014 are similar to the 

historical 30.95 average.

g. FDI and FII

This table below shows FDI in Thailand

Foreign Direct

Investment

(million USD)

2012 2013 2014

FDI Inward Flow

Million USD)

9,168 14,0168 12,566

FDI Stock (million

USD)

172,471 178,259 199,311

Number of Greenfield

Investment**

140 153 164

FDInInwards(in % of

GFCF****)

808 1305 13.0

FDI Stock(in %GDP) 47.1 46.0 53.3

As it is clear by looking at the above table which tells that the FDI of thailand has

increased continuously over the period of time.

FII of thailand in dollars million for purchases is around 33,751.3. And for sales is

31,771.1 .

h. Trade – Exports

a. Nature of exports

China has replaced the United States as Thailand's largest export market while the latter still

holds its position as its second-largest supplier (after Japan). While Thailand's traditional major

markets have been North America, Japan, and Europe, economic recovery in Thailand's regional

trading partners has helped Thai export growth.

Thailand has been the largest rice exporter in the world. Forty-nine per cent of Thailand's labor

force is employed in agriculture.

Developments in agriculture since the 1960s have supported Thailand's transition to an

industrialised economy. As recently as 1980, agriculture supplied 70% of employment. In 2008,

agriculture, forestry and fishing contributed 8.4% to GDP; in rural areas, farm jobs supply half of

employment. Rice is the most important crop in the country and Thailand had long been the

world's number one exporter of rice, until recently falling behind both India and Vietnam. It is a

major exporter of shrimp. Other crops include coconuts, corn, rubber, soybeans, sugarcane and

tapioca.

Thailand is the world's third-largest seafood exporter. Overall fish exports were worth around

US$3 billion in 2014, according to the Thai Frozen Foods Association. Thailand's fishing

industry employs more than 300,000 persons.

b. Percentage contribution by top five goods

Machinery and parts, vehicles, integrated circuits, chemicals, crude oil, fuels, iron and steel are

among Thailand's principal imports. The increase in imports reflects a need to fuel production of

high-tech items and vehicles.

1. Machines, engines, pumps: US$38,672,183,000 (17%)

2. Electronic equipment: $30,735,313,000 (13.5%)

3. Vehicles: $26,022,818,000 (11.4%)

4. Rubber: $14,327,692,000 (6.3%)

5. Plastics: $13,504,184,000 (5.9%)

c. Percentage contribution by top five countries

To US (10.9 percent of total exports), China (10.6%), Japan (10.3%), Indonesia

(5.3 %), south korea (4.5%)17

i. Trade – Imports

a. Nature of imports

When a shipment arrives in Thailand, importers are required to file a Goods Declaration and

supporting documents for the imports with a Customs officer at the port of entry. Imported cargo

are not legally entered Thailand until after the shipment has arrived within the port of entry,

delivery of the merchandise has been authorized by Customs, and applicable taxes and duties

have been paid. It is the responsibility of an importer to arrange for examination and release of

the imported cargo.

In addition, depending on the nature of the imports, and regardless of value, the importers may

need to obtain a permit to facilitate clearance of the imports. Some, not all, of the goods

requiring permit, and the relevant permit issuing agencies, should be contacted prior to the

importation.

17 https://atlas.media.mit.edu/en/profile/country/tha/

In case of red line (high risk shipment), the minimum documents required to be submitted to the

Customs for the clearance of imports consists of:

1. Import  Declaration

2. Bill of Lading (B/L) or Air Waybill

3. Invoice

4. Packing List

5. Import License (if applicable)

6. Certificates of Origin (if applicable)

7. Other relevant documents such as catalogue, product ingredients, etc.18

b. Percentage contribution by top five goods

1. Oil: $48.1 billion (21.1% of total imports)

2. Electronic equipments: $38.1 billion (17.7%)

3. Machines, engines, pumps: $29.8 billion (13.1%)

4. Iron and steel: $12 billion (5.3%)

5. Gems, precious metals, coins: $9.5 billion (4.2%)19

c. Percentage contribution by top five countries

From Japan (22%), China (18%), Malaysia (6.3%), United States (5.3%), and

South Korea (4.5%)20

j. BoP analysis

18 http://www.customs.go.th/wps/wcm/connect/custen/importexport/importer/importer+19 http://www.worldsrichestcountries.com/top_thailand_exports.html20 https://atlas.media.mit.edu/en/profile/country/tha/

Net current transfers are recorded in the balance of payments whenever an economy

provides or receives goods, services, income or financial items without a quid pro too.

All transfers not considered to be capital are current. Data are in current U.S dollars.

In 2013 the change in BoP of thailand was -14.12%, in 2012, 12.75%, in 2011, 79.18%,

and in 2010, 13.08%.

k. Impact of significant event 1 on the economy

  The liberalization of the financial sector had been proved to be too reckless. Statistics such as

ratio of foreign liabilities to foreign assets, non-performing loans, contribution of inward FDI to

current account financing, had been evidences of the recklessness. However, even a good

statistics like high GDP growth could not have made the economy joyful. Thailand’s GDP

growth had been high at around 8.5% during the first half of 1990s. Nevertheless, a large

contribution of the growth had come from production of non-tradable good and from pure

speculative capital inflow. The structure of the Thai economy was still not ready for that large

amount of capital not to be used in real investment. If Thailand had run current account surplus

and balance of trade surplus as high as  that of Taiwan or Singapore (table9 and table 10), it

might have a reason and want to liberate itself that much in the financial world.

l. Impact of significant event 2 on the economy

Another government conduct worth to be discussed was its loose monetary policy during  the

period right after the first devaluation of the baht. Committing to that policy, the government

showed its steadfast attempt to promote the production and thus the growth of the economy, an

objective which had never been set aside. It had kept interest rate low so that the amount of

money supply in the economy would be high which would encourage domestic consumption and

investment. This conformed to the ‘Laffer curve’ condition saying that a fall not a rise of interest

rate would have strengthen the economy and restored confidence. Unfortunately, the problem of

bank panic was so serious that no matter how much money supply the economy had, the

creditors would attempt their best to take money out of the system and did not invest. This

resulted in a continuous spiral of currency depreciation that dramatically increased the real

burden of the foreign-currency liabilities.  Seeing that a loose monetary did not work, the

government later on had switched to tighten its monetary policy.  It raised domestic interest rate,

hoping to retain money in the system. However, the policy turned out to be propelling a more

serious contraction of the Thai economy and credit crunch. 21

m. Impact of 2008 financial crisis on the economy

During the last months of 2008, the Thai authorities' response to the global financial

meltdown was sluggish, with no clear direction. This is largely due to the on-going domestic

political turmoil. In Thailand's case, the run-up to the global economic crisis was further

complicated by the effect of the airports shut-down, which caused severe panic among the

public and the business community — particularly the tourism industry. The number of

tourists fell by 21% on the year-on-year record. Also, up until the end of March, the

demonstrations in the streets became more subdued when compared to what the previous

government had to confront. It is vital to note that the crisis which Thailand is now facing has

not derived from financial mismanagement or unsound monetary or fiscal policies. It is

essentially a result of its economic structure and long-term development strategy, which have

been increasingly reliant on exportation and foreign investment as the engine of growth.

Export accounts for 70% of the national income. Total foreign investment in 2006 was $1.4

trillion while the GDP was $2.5 trillion in the same year. Since November 2008, the year-on-

year export level has been in decline for the last four months. Even with the sharp increase in

the export of gold, jewelry and ornaments due to high prices, policy makers went into a state

of shock when it was revealed that the total export plunged by 26.4% in January 2009.

External demand for electronics, auto parts, electrical appliances, agricultural and agro-

industrial products has dried up. At the same time, imports also plummeted by 40.3% in

21 http://www.columbia.edu/cu/thai/html/financial97_98.html

February, the sharpest drop in 11 years. This was not only because of the 20% contraction in

consumption. The decline also happened in all categories of imports, especially energy

(54.78%), capital goods, (23.8%), and raw materials (45.3%). These figures confirmed that

the Thai economy is facing diminishing production and economic activities in general. With

the 26.4% reduction of exports Thailand is facing, the GDP would decrease by at least

5%.Considering that each 1% drop in GDP costs 200,000 jobs, Thailand will see it workforce

become unemployed by a million within this year. This is unemployment due solely to

primary export reduction. The government has already admitted that, if nothing is done — or

if the government stimulus measures fail to deliver — GDP could plummet by 9% and the

total unemployment level could almost quadruple, reaching nearly 2 million, from 510,000 at

the end of 2008.This level of lay-off has not been seen since the Asian financial crisis of the

late 1990s. Unfortunately, unlike a decade ago, the Thai rural sector presently has much less

ability to absorb back laid-off workers from factories. Moreover, the price of agricultural

produces has collapsed by around 21% compared to the previous years. The government

continues to finance price support schemes to reduce the pressure on the agriculture sector.

Still, since the money stays in farmers’ hands for only a very short period of time before

being transferred to landlords, chemical companies and local money lenders. Without

addressing structural problems in the sector, such schemes will hardly lead to an

improvement in the quality of life of small rural producers. With the substantial decrease in

government revenue due to current economic conditions, the package will force the

government to run a 3.6% budget deficit, including seeking financial support from countries

like Japan and China. Thailand will also need help from international financial institutions

such as the World Bank and the Asian Development Bank.

The spending bill will finance 18 separate projects with the main objectives of helping

finance new jobs and giving a boost to the flagging economy. According the Minister of

Finance, the government’s approach is to “put money back in the hands of the public, rather

than keep it in the hands of the government.”22

17. Economy – Before and after 2008 crisis

22 http://www.theglobalist.com/thailand-and-the-world-financial-crisis/

  Since early 1990s, Thai economy had attracted massive volumes of capital inflow from aboard

due to its accommodating economic policies, goal, healthy-looking conditions, and some other

outside factors such as the stagflation of Japanese economy and the recession in European

countries during 1990s. After a long period of strict financial regulations that limited credit

expansion of commercial banks, starting from the beginning of 1990s, the Thai government had

decided to accommodate a policy of financial market deregulation and capital account

liberalization. Moreover,  with an exchange rate fixed to a basket of world dominant currencies

especially US dollars, the Thais had enjoyed a long period of nominal exchange rate stability as

the baht had fluctuated very narrowly between 24.91-25.59 baht per dollar, stable price level  of

3.3-5.9%, and high interest rate at around 13.25% before the crisis.

            The Thai government also had done a good job in keeping inflation rate low between

3.36% and 5.7% as well as fiscal balances surpluses. Plus the economy had possessed a

characteristic of high saving rates situated at around 33.5% of GDP while its GDP growth had

stayed at an impressive level of 8.08-8.94 during 1991-95. As a result, the Thai economy had

become very attractive to international speculators, many of whom had channeled their large sum

of capital out of Japan which had undergone a lengthy period of stagflation and low interest rate.

And by 1995, Thailand had a net capital inflow of US$ 14.239 billion, more than one hundred

percent increase from its net capital inflow three years ago.

            As a consequence of the huge overflow of capital, domestic investment had its prime

years and the banking sector had expanded very rapidly. Thailand’s investment rate between

1990-96 as shown in came in the first place compared to the other nations of the same region.

Stock market prices rose by 175% in aggregate and by 395% in property sector. There emerged

more than 50 banks and non-banks financial institutions which had been controlled and

monitored much leniently by the Thai central bank—the Bank of Thailand. These financial

institutions had made a large sum of money out of the economy as they had had small constraints

and difficulties in borrowing quite excessively from abroad and lending with a dear interest at

home. By early 1990s, Thailand’s banks were ranked among the world’s most profitable as the

banks could charge up to 4 percentage points more interest for loans than they paid on deposits, a

discrepancy which was 4 times bigger than the spreads of less than 1 percentage point in the

banking system of many developed economies. And Thailand’s lending boom measure

calculated from  the growth of bank lending as a percentage of GDP ratio was 58%, the highest

in the East Asian group.

            However, the growth of the capital inflow and the lending practice of the Thai financial

institutions were not very healthy nor wise. A large part of the capital had been put into non-

productive sectors especially real estate. Those sectors were non-productive because they

produced non-tradable goods which were sold only domestically, resulting in less national

volume of exports and thus weaken the economy’s balance of trade as well as the capital

account. A statistic showed that 10-35% of bank loans were committed to bricks and mortar. In

addition, only a small portion of the capital inflow could be categorized as foreign direct

investment (FDI)—a non-speculative, thus real, type of investment that went to the build-ups of

capital goods, factories, inventories and land, the percentage of contribution of inward FDI to

current account financing was calculated. The proportion of FDI to the Thai economy was low

and had decreased over time from 33.57% in 1990 to 15.90% in 1996, compared to that of

Malaysia who had a proportion of FDI above 90% throughout the time period. In addition, the

financial institutions tended to lend recklessly without a prudent procedure of lending contraction

and monitoring. This was an adverse selection problem resulted from moral hazard on the side of

the financial institutions as the institutions had expected a safety net provided by the Thai

government or the Bank of Thailand if a bank run occurred. The same problem was also with the

foreign creditors and depositors sides as they credited money to the financial institutions with

little care, having in mind the government’s bailout policy.  As Jeffrey Sachs had presented an

early analysis of the role of excessive lending driven by ‘moral hazard’ incentives:

18. International trade membership

Thailand's major exports are rice, tapioca products, cane sugar and molasses, and rubber for

agriculture; chemicals, polymers, and plastics for the manufacturing industry; and gypsum,

natural gas, and feldspar for the mining industry. Bank of Thailand statistics as reflected in the

Asian Economic Survey of 2000 identified the country's major export products as machine parts,

circuits, frozen shrimp, prawns, sundry items, computer parts, garments, vehicle parts, and

plastic products. On the other hand, its major imports are petroleum, integrated circuit parts, and

chemicals.

The balance of trade was consistently negative until 1998, which means that the value of the

country's imports was bigger than the value of its exports. The discrepancy was minimal in 1970,

with import value exceeding export value by only US$541 million. In 1975, imports exceeded

exports by US$1.072 billion, which doubled in 1980 to US$2.709 billion. In 1985, imports still

exceeded exports by US$2.21 billion, which had quadrupled by 1990 to US$10.309 billion. In

1995, the balance still stood in favor of imports by US$14.337 billion. In a considerable reversal,

imports in 1997 exceeded exports by US$5.319 billion but the following year, exports exceeded

imports by US$11.485 billion.

Despite the uneven balance of trade, the Thai economy continued to grow by an average of 6.8

percent in the 1970s, 7.5 percent in the 1980s, and 8 percent in the early 1990s before the Asian

financial crisis. This growth can be attributed to 2 factors, namely the boom of the tourism

industry and the inflow of foreign direct investment. According to International Historical

Statistics, in 1970, the services sector contributed 44.1 percent of GDP, which increased in 1980

to 49.7 percent. Though this contribution fell to 46.9 percent in 1999, it is safe to say that the

dollar earnings from the tourism industry generated a substantial amount, enough to offset the

trade imbalance.

Foreign direct investment (FDI) is another major factor in the growth of the economy since the

mid-1980s. In 1988, FDI infused US$1.25 billion into the economy, partly explaining the 7.5

percent growth despite a US$4.332 billion discrepancy in balance of trade in favor of imports.

Foreign direct investment doubled to US$2.5 billion in 1990.

Thailand is a member of several international trade organizations including the ASEAN Free

Trade Area (AFTA), the Asia Pacific Economic Cooperation (APEC), and the World Trade

Organization (WTO).23

23 http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Thailand-INTERNATIONAL-TRADE.html

19. Financial markets

 Financial market is a crucial component in the economic system.  It is the engine that drives the

economy, being a platform where surplus units meet deficit units and negotiate various kinds of

financial agreement.  The objective of financial market development is, therefore, to enhance the

capability of the financial market to act efficiently as an intermediary.  An efficient financial

market is one with proper depth and breadth, that is on the supply side, there is a wide range of

financial instruments, offering choices of issuers, credit risks, and etc. to satisfy all classes of

asset demand. On the demand side, there has to be sizable investment demand from various types

of investors, with different risk-return appetites. Also, a good diversity among issuers and

investors usually brings about a good mix of market views, leading to an active exchange of

financial assets.  A highly liquid financial market as such is able to accommodate large and

varied issuance of financial instruments with minimum price effect. Here, financial instruments

can be quickly exchanged at reasonable cost. Efficient clearing and settlement system is a key

supporting factor that helps lower transaction cost.  

    A liquid financial market also enables central bank to efficiently conduct its day-to-day

operations to attain its interest rate target. 

Roles of BOT in Financial Market Development

          Progress in the development of the Thai financial market has continued in several aspects. 

A variety of task involve several entities in the public and private sectors; for instance, the Public

Debt Management Office (PDMO), the Office of Securities and Exchange Commission (SEC),

the Stock Exchange of Thailand (SET), the Thai Bond Market Association (ThaiBMA), the Bank

of Thailand (BOT), as well as academics and market professionals.24

          Each entity has been tasked with the main responsibility of developing its specialized

area.  For BoT, money market (BIBOR and Private Repurchase Market) as well as Asian Bond

Fund (ABF) are focused.

20. SWOT analysis

24 https://www.bot.or.th/English/FinancialMarkets/FinancialMarketDevelopment/Pages/default.aspx

a. SWOT analysis of the economy with no more than five points under each

header backed up by references

1. STRENGTH

High flexibility and adaptability.

Ability to appropriately respond to niche market

High skill and artistic capability

Good service mind.

2. WEAKNESS

Lack of awareness, knowledge, capability in management, marketing,

technology and innovation.

Lack of systematic business management and professionalism.

Lack of product design and R&D, and packaging development.

Lack of governance, energy saving & environmental conservation.

Low quality workforces.

3. OPPORTUNITY

New business paradigms more favourable to SMEs.

Positive impact from free trade.

Wider recognition of Thai wisdom and culture.

Gaining more importance from public sector.

4. THREAT

Impact from emerging economics entering world markets.

New form of NTBs in international markets.

Impact from the widespread of globalization.

More complicated law and regulations.

Limitation in good business and locations.25

21. References

25 http://www.thailand.com.co/a/SMEs_Services/Thailand_SMEs/SMEs_Promotion_Plan/2012/0104/1725.html