The World Bank recognizes Thailand as a success story over the last four decades: a nation which has made great progress in social and economic development, moving from a low-income to an upper-income country in less than a generation. The country is widely appreciated as a success story of development with sustained strong growth and poverty reduction.
It is expected that the Thai economy will continue to grow favourably, driven primarily by increased consumer spending and expanding private investment. Thailand constitutes 17% of ASEAN’s total GDP and is the bloc’s second largest economy.
Besides being one of the largest economies in Southeast Asia, Thailand is also strategically located as a hub for continental ASEAN. A regional leader in tourism, automotive and electronics sectors, Thailand’s economy has been resilient despite some political upheaval. The advantages that the country offers include a skilled workforce, liberal economic policies and a strategic location as an entrance gateway to the greater Mekong region. With newer, investor-friendly investment policies in place, the country is currently one of the most attractive commercial destinations in ASEAN. With its tropical climate, welcoming population and well-developed infrastructure, Thailand provides a very pleasant environment to foreigners working there.
Thailand’s economy grew at an average annual rate of 7.5% in the boom years of 1960-1996 and 5% during 1999-2005 following the Asian financial crisis. This growth created millions of jobs. Thailand’s GDP stood at US$505BN in 2018 and grew 2.4% to US$543.6BN in 2019, according to official data from the World Bank. FDI flows were at US$4bn in 2019.
The EIU expects the GDP growth rate to return to modest growth in 2021 following a steep recession (-6.2%) in 2020 amid the pandemic. Subsequently, real GDP growth will stabilise at around 3% per year in 2023-25.
Thailand is among countries with the most reforms in business regulation over recent years, reducing the time to start a business from 29 days to 6 days. The country has improved considerably its ranking in the World Bank’s Doing Business: it occupies 21st position, among 190, in the Doing Business 2020 ranking, gaining six positions from the previous year. The present government is strong and stable which is reassuring for foreign investors.
Sumit Dutta is the Founder and Chief Executive Officer of ASEAN Business Partners. Prior to this, Sumit spent 26 years working for HSBC, one of the biggest banks in the world, in countries including Indonesia, Vietnam, USA, Hongkong and India.
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