Business Environment in Thailand
Thailand is Southeast Asia's second largest economy (behind Indonesia), and 4th richest nation, according to per capita GDP, after Singapore, Brunei and Malaysia. It functions as an anchor economy for the neighboring developing countries like Laos, Burma, and Cambodia. Due to its openness to foreign trade, the country was hit hard by the international financial crisis and entered into a recession in 2009 (-2.2%) for the first time since the Asian crisis of 1997-98. Estimated at 7.5%, there was a quick and dynamic growth in 2010, driven by the resumption of international trade, household incentives and investment projects (infrastructure).
With the recovery under way, the authorities will eliminate fiscal and monetary incentive measures adopted in order to combat the crisis. The country was also involved in a stimulus program called “Thailand: Investing for strength”. This program will go on until 2012, with a budget of around 30 billion euros, which should allow for the creation of about 1.5 million jobs and stimulate private consumption. Mid-term, the government is looking to strengthen infrastructure and develop the finance sector, in order to ensure a dynamic and sustainable recovery.
Significant progress has been made in terms of development: poverty has decreased sharply during the last decades. In spite of the crisis’ impact on the country, unemployment rate has remained low (1.4%).
|GDP (billions USD)||263.71e||318.85||332.47||367.88e||397.99e|
|GDP (Constant Prices, Annual % Change)||-2.3||7.8e||4.0e||4.5||4.7|
|GDP per Capita (USD)||4,151e||4,992e||5,174e||5,691||6,120e|
|General Government Balance (in % of GDP)||-2.1||-2.3||-2.4||-1.7e||-1.4e|
|Inflation Rate (%)||-0.8||3.3e||4.0||3.4e||2.3|
|Unemployment Rate (% of the Labor Force)||1.5e||1.0e||1.2e||1.2e||1.2e|
|Current Account (billions USD)||20.29||7.44e||1.10e||-0.80||-|
|Current Account (in % of GDP)||7.7e||2.5||0.3||-0.2||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
The Thai economy is heavily based on agriculture, which contributes around 10% of the GDP and employs almost 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 just under half 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 about half of the GDP.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||41.7||20.7||37.4|
|Value Added (in % of GDP)||11.6||43.3||45.1|
|Value Added (Annual % Change)||-0.5||-4.2||-0.4|
Source: World Bank - Last Available Data.
|Thailand Baht (THB) - Average Annual Exchange Rate For 1 USD||40.22||37.88||34.52||33.31||34.29|
Source: World Bank
Indicator of Economic Freedom
- Moderately free
- World Rank:
- Regional Rank:
Foreign Trade in Figures
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 140% of the GDP in 2007-2009) 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 shows a trade surplus, a trend which should continue.
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||128,773||139,966||179,225||133,668||182,400|
|Exports of Goods (million USD)||129,722||153,867||177,778||152,422||195,319|
|Imports of Services (million USD)||32,841||38,173||46,033||37,541||45,429|
|Exports of Services (million USD)||24,636||30,124||33,056||29,677||33,985|
|Imports of Goods and Services (Annual % Change)||3.3||4.4||8.5||-21.8||-|
|Exports of Goods and Services (Annual % Change)||9.1||7.8||5.1||-12.7||-|
|Imports of Goods and Services (in % of GDP)||70.1||65.0||73.9||57.8||-|
|Exports of Goods and Services (in % of GDP)||73.6||73.4||76.5||68.4||-|
|Trade Balance (million USD)||13,844||26,762||17,385||32,691||-|
|Trade Balance (Including Service) (million USD)||5,651||17,478||5,124||-||-|
|Foreign Trade (in % of GDP)||143.7||138.4||150.4||126.2||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|United Arab Emirates||1.5%|
|Other partnersClose extended list||56.1%|
(% of Imports)
|United Arab Emirates||4.7%|
|Thailand This flow is explained by the way local Customs Authorities report trade with overseas or special territories (e.g. Hong Kong or Taiwan in the case of China, French West Indies in the case of France, etc) as well as the treatment of re-imported (or re-exported) products, which get out (or enter) of the country for a limited time, with the intention of being re-imported (or re-exported) without significant transformation overseas.||1.3%|
|Other partnersClose extended list||49.4%|
Sources of General Economic Information
Ministry of Finance
- Statistical Office
National Statistic Office
- Central Bank
Bank of Thailand
- Stock Exchange
The Stock Exchange of Thailand
- Search Engines
- Economic Portals
Thai Chamber of Commerce
- Executive Power
- Governed by a constitutional monarchy, Thailand has a bicameral legislature system with a House of Representatives and a Senate. Thailand’s 76 provinces each administered by an appointed Governor are divided into districts, sub-districts (tambons) and villages.
The King is the chief of the state and the monarch is hereditary. he has little direct power but commands enormous popular respect and moral authority which he has used on occasion to resolve political crises that have threatened national stability. Following national elections for the lower house of the parliament, the leader of the party that can organize a majority coalition is appointed as Prime Minister by the King for a four-year term. Prime Minister is the head of the government and holds all the executive powers including implementation of the law in the country and running the day-to-day affairs. The cabinet is appointed by the King on recommendation of the Prime Minister.
- Legislative Power
- The legislature in Thailand is bicameral. The parliament called National Assembly consists of: Senate (the upper house) having 200 seats with its members elected by popular vote to serve six-year terms and the House of Representatives (the lower house) having 500 seats with its members elected by popular vote to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot veto the acts passed by the parliament. When not under military rule, the people of Thailand enjoy considerable political rights. The coup of September 2006 has taken place after 15 years of civilian and democratically-elected governments. The 2006 interim constitution was later surpassed by the permanent constitution on 24 August 2007. Martial law was partially revoked in January 2007. The ban on political activities was lifted in July 2007 following the 30 May dissolution of the Thai Rak Thai party. The new constitution has been approved by a referendum on 19 August, which led to a return to democratic elections on 23 December 2007.
- Main Political Parties
- Thailand has a multi-party system. The major political parties in the country are:
- TRT (Thai Rak Thai Party) – has no clear ideological platform, but is commonly described as a ‘populist’ party;
- DP (Democratic Party) – the oldest party in the country, opposes any kind of military dictatorship, pro-democracy;
- TNP (Thai Nation Party) – a conservative nationalist party;
- Great People's Party – advocates left-wing ideology.
- Current Political Leaders
- King: PHUMIPHON Adunyadet (since June 1946) – hereditary
Prime Minister: ABHISIT Wetchachiwa (since december 2008).
- Next Election Dates
- Senate: April 2012
House of Representatives: Year 2011
Indicator of Freedom of the Press
- World Rank:
- 6 places down compared to 2008
Indicator of Political Freedom
- Partly Free
- Political Freedom:
- Civil Liberties:
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