Thai Economy To Continue Upturn In 2018

Monday, 4th of December 2017

The Thai economy is poised to grow close to 4% in 2017, the highest rate since 2012

The Thai economy this year is poised to grow close to 4%, the highest rate since 2012. There are three main reasons for growth this year: a recovery in exports, continued robust growth in tourism, and high farm incomes in the first half of the year..

However, growth has been so far concentrated in the sectors that are related to exports and tourism, while farm incomes have softened in the second half of the year. Will these growth factors extend into next year? Will incomes of mid- to low-income households benefit from growth?

Can government measures to help low-income households and boost consumption help stimulate the economy? These are the questions that will be discussed in this article.

Growth of the Thai economy this year has been largely supported by the recovery in exports, which would extend into next year. This is in line with the recovery of Thailand’s major export markets, particularly the US. Exports are estimated to grow by 8% this year, after contracting for four consecutive years.

Exports and Tourism on the rise.

Export growth to all major markets, namely the US, EU, China, Japan and Asean, has been strong. Growth in these markets is forecasted to continue next year, with an acceleration in the US. This would lead to continued robust exports next year, though growth may be slightly lower than this year’s.

In addition, tourist numbers are expected to accelerate after the mourning period for the late King Rama IX ended.

The trickle-down benefits from exports and tourism to other sectors of the economy will be felt in the last quarter of this year onward. The immediate incomes from exports are concentrated in the export industries, while those from tourism are concentrated in a few major tourist destinations in Thailand.

However, the increased spending of people in those two sectors will lead to greater production of goods, thus, higher incomes in other sectors as well. This effect is now gradually being felt; retail sales, for example, have started to rise.

Farm incomes, which have risen by almost 20% in the first half of this year, have also helped boost spending. Farm incomes from rice, rubber and sugar have been high in the first half compared to the same period last year. Growth of rubber and sugar incomes have slowed down in the second half as global prices started to decline.

The trickle-down benefits from exports and tourism to other sectors of the economy will be felt in the last quarter of this year onward. The immediate incomes from exports are concentrated in the export industries, while those from tourism are concentrated in a few major tourist destinations in Thailand.

Source: https://www.thailand-business-news.com/economics/62221-thai-economy-continue-upturn-2018.html

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