Sethaput Suthiwartnarueput: The Thai economy – the current state and the way forward<\/a>“) relies heavily on low-value jobs and a labor sector based mainly on agriculture and self-employment. 31% of workers are farmers and only 44% are wage earners. This reduces the bargaining power of workers, as most depend on seasonality or their own business activity.<\/p>\n\n\n\nLow productivity and the lack of negotiations for wage increases directly affect the economic development of the country. Despite the flexibility of the labor sector, with the easy transformation of labor from one sector to another, the economy remains stagnant as wage increases and general growth do not follow the expected path.<\/p>\n\n\n\n
Exports, which make up 70% of Thailand’s economy, have been in decline due to the global slowdown and the country’s lack of competitiveness compared to other Asian neighbors such as Vietnam, which is set to increase its exports by 15% in 2023. At the same time , the strengthening of the Thai currency, the baht, by 10% against the dollar has worsened the situation, making Thai products more expensive in international markets.<\/p>\n\n\n\n
What was seen as an opportunity for Thailand to attract international business and investment, especially in the area of \u200b\u200belectric car production, did not pan out. Declining demand from key markets such as the US and China, as well as domestic infrastructure and political stability issues, have affected exports and the country’s overall economic momentum.<\/p>\n\n\n\n
Tourism, which accounts for 11.5% of GDP, has not fully recovered from pre-pandemic levels. In 2023, Thailand welcomed around 28 million tourists, up 150% from 2022, but still 30% lower than 2019. This recovery is not strong enough to offset losses in other sectors of the economy.<\/p>\n\n\n\n
In addition, over-indebted households are a significant obstacle to the growth of domestic consumption. Household debt reaches 87% of GDP, the sixth highest worldwide. High debt levels are constraining consumption and worsening the country’s economic situation, despite its stable labor market.<\/p>\n\n\n\n
The government’s response<\/strong><\/p>\n\n\n\nIn an effort to reverse the situation, the Thai government announced the provision of money to vulnerable citizens through digital wallets. The plan is expected to boost consumption and boost the economy, but many experts see it as a temporary solution. Without structural reforms, such as increases in productivity and private investment, Thailand’s economy will continue to face serious challenges.<\/p>\n\n\n\n
Thailand’s economy, despite its impressive features such as low unemployment and steady tourism, appears to be plagued by deep structural problems that require more complex solutions.<\/p>\n\n\n\n
Officially, however, and with the exception of some small cities such as Singapore or Gibraltar and the small oil nations in the Persian Gulf such as Qatar, Thailand is said to be the country with the lowest unemployment in the world. With 1.07% unemployment in the country, all its citizens are productively engaged in the economy, while they aspire to become the factory of Asia and a tourism sector seems to shine, becoming one of the most attractions from around the world. However, all this potential concentrated in the Southeast Asian country is not only not exploding into great economic growth, but the country is openly talking about being in “crisis”, disappointing with its GDP and seeing how it outperforms all its neighbors.<\/p>\n\n\n\n
The country was fully excited for an export revival as it would become the “Detroit” of Asia, attracting the world’s leading factories. However, this is far from the case and its main strengths falter while its neighbors shine. Faced with this reality, the country assumes that it must take action and, although it was already planned before reaching the doors of the “crisis”, they believe that domestic consumption could help its lagging economy thanks to an injection of liquidity 300 dollars. a year its citizens. But why is what looked like it would be the great engine of Southeast Asia, with one of the most stable currencies, ailing?<\/p>\n\n\n\n
Thailand’s labor market typically has a low and stable unemployment rate, along with slow wage growth. This is attributed to four main characteristics: firstly high demand for low-skilled workers, secondly: flexibility of labor supply, thirdly the small percentage of employees and fourthly the low bargaining power of workers.<\/p>\n","protected":false},"excerpt":{"rendered":"
Thailand’s economy, despite its very low unemployment rate (1.07%), faces serious challenges and is considered to be “on the brink of an economic crisis”….<\/p>\n","protected":false},"author":1,"featured_media":20901,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[821,390],"tags":[1983,129,6060,898],"class_list":["post-20900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","category-politics","tag-economy","tag-gdp","tag-thailand","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/20900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20900"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/20900\/revisions"}],"predecessor-version":[{"id":20902,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/20900\/revisions\/20902"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/media\/20901"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}