World travelers know that the economy of each country is unique and it usually represents the quality of life that is present at any given time. Of course, economic growth is usually determined by the activities of the people within a country. But with international trade and tourism working as key features in the world, we can see that there are many different factors that have economic implications for the future
With the right domestic activities and a strong international presence, a strong economy emerges. Thanks to technology, travel, and rising international trade sustained economic growth, Thailand has become known as a country in Southeast Asia with a rich cultural heritage that has a lot to offer the world. The country’s activities on the international scene have helped create wealth within the nation, and many market analysts expect the Thai economy to continue to improve in the years ahead.
Sectors of Industry
Every economy has key sectors that are crucial to its structure, based on geographic location and specific resources available. As a result, economic sectors in each individual nation might differ from those of other nations. In Thailand, one of the major sectors is agriculture and downside trends in last years production weighed on export trade figures.
Analysts have said that this is not a surprise, due to the amount of rice that Thailand exports yearly. With a spot as one of the leading producers of rice in the world, agriculture is clearly a lucrative market sector for Thailand. Agriculture contributes just over 8% of Thailand’s GDP.
This is an impressive statistic, but it is bettered by the fact that agriculture employs over 30% of the people. Thailand also produces many other agricultural products. Some of them are tobacco, sugar, cotton, and shrimp. Fishing is very high on the list, as well, for exporters in Thailand.
Another sector of importance in Thailand is manufacturing. The number of appliances, devices, and cars used in the world has increased significantly in the last few years. All these industries have components that are manufactured in Thailand.
Tourism and the Economy
The amount of products exported by this industry has contributed to the decline of agricultural export. Manufacturing provides another boost to Thailand’s economy, with a 35% contribution to the GDP. With such importance from the sector, the country has to favor it. It also contributes to the fight against unemployment as it employs over 23% of the population.
Another important sector in Thailand’s economy is the financial industry. Tourism falls into this category and is very lucrative for Thailand. Tourism provides the highest contribution to employment and GDP. This is why it has become very popular in Thailand. It has also put Thailand as one of the biggest cultural destinations in the world. Tourism contributes to about 57% approximately of the GDP of Thailand. It also employs more than 45% of the population. Thanks to this, the effort put into tourism has increased. This has also brought an increase in the number of yearly tourists. Thailand is one of the top tourist destinations in Asia and the world.
In southeastern Asia, Thailand has one of the region’s largest economies. Thanks to the rising economic status, Thailand provides support and serves as an anchor to their neighbors. The country has been marked by political tensions, as a military government emerged in 2014. Events like this are normal causes of a downturn of an economy. Regardless, this saw Thailand emerge from having a period of high unemployment.
One of the main reasons for this growth is Thailand’s position in international trade. The country remains one of the largest producers of rice in the world and the presence of a military government contributed to productivity, having a positive economic effect. The recent economic growth had a little dip during the full financial year period in 2019. This was due to U.S. dollar-related trade conflicts between China and the United States. However, the economy looks set to rise again in the year 2020. Experts are predicting that the economy will continue to grow at a steady rate into 2022. With all the economic growth Thailand has achieved, its unemployment levels have dropped. The unemployment rate in Thailand is one of the lowest in the world at just over 1%.
Potential Economic Problems
Every economy has problems it faces. The problem is just different, with some seeking improvement, and others, maintenance. While the economy of Thailand is currently impressive, some of the economic problems in Thailand currently include:
For a country that has a significant percentage of its people working in agriculture, drought is terrible. Shrimp and rice are commodities that are exported in large quantities in Thailand. Drought threatens to reduce export output, and exports have been declining generally and this threatens to reduce figures further. With other sectors like tourism currently declining, the export sector may need to be rekindled. This can help prevent the country from returning to its previous economic state.
The military-led government has since transitioned power to a democratic government. While this is a good thing and is meant to improve stability, that has also created cultural turbulence. As a result, there is instability in the political arm of the country. The new government is yet to settle and this unrest has spread and there are concerns as to whether the government will last for a long period of time.
Weakening global economy:
Currently, the world as a whole seems to be having a bad time economically. A lot of people are quick to point fingers at the tensions between the USA and China. Whether this is accurate or not, there is a problem that is clear and needs addressing. The outbreak of diseases like the coronavirus has also contributed to the weak economy. All these factors are affecting countries with high tourism rates like Thailand. With tourism providing a significant percentage of its GDP, Thailand has cause to be concerned. However, if the current coronavirus scare and the China USA tension ends, tourism may rise again.
Richard Cox is an active investor with more than two decades of experience in the financial markets. He is a syndicated writer, with works appearing on CNBC, NASDAQ, Economy Watch, Motley Fool, and Wired Magazine. Market commentaries implement advanced technical analysis techniques to trade macroeconomic trends in foreign exchange, global index benchmarks, options, and the entire precious metals complex. Follow his investment commentaries at https://AskTraders.com.