Century21 Sweet Home Blog

The Thai Economy

Thailand is categorized as an emerging country, whose economic growth reached 2.9% in 2013. It’s considered the second largest economy in Southeast Asia behind Indonesia and does not seem ready to give up its place. This is thanks in particular to the emergence over the years of a solid middle class that boosted consumption and investments.

A Bit of History

Historically an agricultural country, Thailand experienced an initial economic acceleration in the 1980s – 1990s with the arrival of Japanese investments and an international opportunity. The combination of these two elements allowed an industrialization of the country, which put it on the rails of development. To illustrate this point, between 1985 and 1996, the country’s growth rate flirted with the 9%, which earned it the name of “Asian Tiger”.

Another key element of the country’s economic development is its participation in ASEAN, a free trade agreement between 10 countries in Southeast Asia, including Vietnam, Indonesia, and Cambodia, incorporating the elimination of customs duties in particular. This agreement was signed in Bangkok in 1967.

Following the Asian economic crisis of 1997, Thailand decided to specialize in export sectors such as automotive and agri-food.

Current Situation

An important economic sector in Thailand is agriculture, which employs 59% of the working population and contributed to 11% of GDP in 2015. Rice is obviously the strength of this sector with Thailand the world’s largest exporter of the cereal. Overall this industry sector, developed during the specialization of the 2000s, is now 40% of the GDP.

Similarly, the tourism sector is another one of the strengths of Thailand, accounting for 9% of the GDP, marking the growth of services, and a tertiarization of the economy.

Strategy for the future of Thailand is now seeking to be the driving force behind the rise of new technologies. To do this, the Thai government wants to put in place a new visa aimed at increasing start-ups in the Kingdom. Indeed, this new visa is reserved for people qualified in their field (principally managers) as well as investors. This motivation is boosted by the establishment of major online services companies such as Spotify. The application is now available in Thailand since August with a premium package at 129 Baht (€3).