Economic trends
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.
Following the international financial crisis in 2009, Thailand showed the first real permanent reduction of its economy's GDP growth in almost ten years. Domestic consumption dropped slightly. There is a reduction in private investmestment while investors are waiting for domestic policy clarification. However, several industrial sectors have started to recover, but the price of agricultural products and in the tourism sector are still falling.
In 2009, the Thai economy has therefore continued into the recession which started in 2008, with recovery expected to take place during 2010 due to public investment, a vital factor for growth in the coming years. In the last few months, inflation has dropped considerably due to the reduction of energy prices. As for the performance of Thai banks, The IMF predicts high capitalization while the number of bad debts has continued to decline since reaching a peak during the Asian financial crisis which hit Thailand in 1997. The country recently activated a recovery plan called "Thailand: Invest to become stronger". This plan which would be spread out up to 2012 and with a budget of approximately euros 30 billion, should allow for the creation of 1.5 million jobs and stimulate private consumption. Thailand can also benefit from its geographical location, between China and India, whose markets are expected to stimulate the global economy in the future. Nevertheless, the country's reigning political instability represents a source of concern for the implementation of the anticipated recovery plans.
Main branches 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.
International trade
Thailand is an emerging economy, very dependent on exports, which count for more than two-thirds of the GDP. Thailand is very open to international trade 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 three import partners are: Japan, China and the United States. Thailand mainly imports electric and electronic equipment, mineral fuels and oil, machinery, iron and steel, and plastics. In 2008, Thailand showed a trade surplus. However, due to the international economic crisis, exports have had a 2 figure drop since the beginning of 2009.
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