Thailand’s economy grew only 1.9% last year, much lower than its Southeast Asian neighbors. Factors include slow demand from export markets and a shift towards high-skilled services. Despite challenges, the economy is expected to improve with a 2.6% growth this year due to factors like tourism, exports, and private consumption.
Thailand’s Economic Slowdown
Thailand’s economy grew only 1.9 percent last year, a stark contrast to its Southeast Asian neighbors like Indonesia and Vietnam, which achieved GDP growth rates of 5.5% and 5.6%, respectively. Factors contributing to Thailand’s slowdown include the slow return of demand from major export markets and a global shift towards value-added services.
Factors Behind Thailand’s Economic Situation
The economic stagnation in Thailand can be attributed to the slow return of demand from major export markets and a global shift towards value-added services that require higher local skills and capabilities. The country faces challenges with low productivity and poor education, leading to a middle-income trap where much of the workforce remains in low-paid, low-skilled jobs.
Challenges and Outlook for Thailand’s Economy
As Thailand struggles to address systemic issues like high household debt and slow economic growth, it faces the challenge of enhancing competitiveness and adapting to the changing nature of globalization. Economic planners and the Bank of Thailand must focus on upgrading the labor force and promoting innovation to stimulate growth and navigate through the middle-income trap, aiming for a projected growth of 2.6% driven by improvements in tourism, exports, and private consumption.
Source : Thailand’s economy lags behind peers with protracted recovery