Publication: Thailand Monthly Economic Monitor: 27 October, 2023
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2023-11-13
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2023-11-13
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The economy continued its moderate expansion, driven by private consumption and improving goods exports. However, the tourism recovery decelerated. Inflation remained significantly below peers; raw food prices fell and energy subsidies contained pressure on living costs. The planned fiscal stimulus measures will provide a short-term boost to growth but delay ongoing fiscal consolidation. The Bank of Thailand unexpectedly raised its policy rate to 2.50 percent. In September, the Thai baht depreciated against major trading partners.
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“World Bank. 2023. Thailand Monthly Economic Monitor: 27 October, 2023. © World Bank. http://hdl.handle.net/10986/40600 License: CC BY-NC 3.0 IGO.”
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Publication Thailand Economic Monitor, April 2011(World Bank, Bangkok, 2011-04)The pace of economic activity is gradually returning to pre-crisis levels. After a roller-coaster of sharp drops, vigorous rebounds and mild contractions, Gross Domestic Product (GDP) was up 4.8 percent in the last quarter of 2010 on a seasonally-adjusted annualized (SAAR) basis, closer to pre-crisis, normal levels. For 2010 as a whole, GDP expanded by 7.8 percent from 2009. Growth was broad-based, with significant contributions from external and domestic demands. Thailand's economy is one of the most energy intensive in the region because of the large (and growing) share of energy-intensive manufacturing in the economy and high proportion of cargo transported by trucks. Thailand can reduce its vulnerability to oil price shocks by raising fuel standards, improving tax incentives for conservation and relying more on rail for cargo transport.Publication Thailand Economic Monitor, November 2010(Washington, DC, 2010-11)Growth has slowed down since the second quarter, but exceeded expectations. Considering the 1) political turmoil; 2) robust growth during the rebound; and 3) slowdown in advanced economies, the Thai economy was expected to contract by more than it did in the second and third quarters. The output of the manufacturing sector expanded in the second quarter, led by still-growing exports and robust private consumption. Demand indeed appears to have been higher than production, as some orders had to be filled by drawing down on inventories. However, a sharp contraction in tourism led Gross Domestic product (GDP) overall to contract in the quarter. The FY10 fiscal deficit was much smaller than initially feared when the budget was proposed. The budget for FY10 was prepared at the trough of the global financial crisis in February 2009 and anticipated only 1.35 trillion baht in revenues. Inflation levels have been low and stable but persistent increases in food prices could pose risks. Overall, slower growth in advanced economies will translate into lower GDP growth Thailand for the next two to three years. Notwithstanding a deceleration in the second half because of the waning global inventory cycle, year-on-year growth in 2010 is expected at 7.5 percent due to the low base of 2009 and the strong first half. Quarter-to-quarter growth will pick up modestly in 2011 to average over 4 percent, but the relatively high base in 2010 results in a year-on-year growth rate of 3.2 percent for 2011.Publication Thailand Monthly Economic Monitor(Washington, DC, 2023-03-21)The economy resumed moderate expansion as private consumption and tourism improved at the beginning of 2023, after a disappointing Q4 outturn. 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The authorities responded with social assistance as well as food and fuel subsidies. While the fiscal consolidation path has been largely maintained thus far, additional borrowing to support energy subsidies may be needed. The recently announced average minimum wage increase of 5 percent is intended to help alleviate the pressure of elevated costs on lower income groups. While the magnitude is not large compared to past wage and inflation developments, it may contribute to inflation and underemployment. The Thai baht depreciated due to expectations of the Fed tightening and the widening current account deficit.Publication Thailand Economic Monitor, June 2010(Washington, DC, 2010-06)The Thai economy runs on a single engine: external demand. The economic roller coaster since the onset of the global financial crisis can be overwhelmingly attributed to fluctuations in the output of three sectors most sensitive to external demand: manufacturing, logistics (transportation and storage), and tourism (hotels and restaurants). As global trade contracted between the fourth quarter of 2008 and first quarter of 2009, Thailand's real gross domestic product (GDP) fell 6.3 percent, before rebounding 6.9 percent through the end of 2009 on a revival in actual and expected external demand. At the end of 2009, real GDP was back to pre-crisis levels, as measured in seasonally adjusted terms. For 2009 as a whole, however, real GDP fell 2.2 percent. The dominance of sectors linked to external demand over Thailand's growth dynamics is not new. Both sets of sectors grew at about the same pace prior to the 1997 financial crisis. However, a structural break took place in the aftermath of the crisis, when sectors linked to external demand grew an average of 6.1 percent between 2001 and 2007 compared to a 4.3 percent growth rate of other sectors. While the sectors linked to external demand are expected to grow below the historical average in the near term due to lower growth in demand from advanced economies, a reversal of the structural change observed since 1998 is unlikely. This will require an acceleration of the growth of the sectors linked to domestic demand. But the constraints that limited the growth of these sectors in the past not only remain but have been compounded in the near term by the escalation of the political conflict. This will ensure that growth rates in sectors linked to domestic demand will also remain below their (already low) historical averages and the dominance of external demand on the economy will continue to increase.
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