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Key Findings on Thailand: East Asia and Pacific Economic Update, May 2012

May 23, 2012

Key Findings

  • In 2012, Thailand’s real GDP is predicted to be at 4.5%. Growth is due to lower global prices, government corporate tax reduction, a strong banking sector, and high international reserves. China's considerable economic growth and signs of recovery in Japan and the USA have also had a positive effect on Thailand’s economy.
  • The Government of Thailand’s flood recovery and rehabilitation programs, as well as its income support policies, have helped boost confidence. Reconstruction and public investments will help the GDP growth in 2012, but imports will also rise. 
  • The challenges the Thai economy will encounter in 2012 are: (1) The Eurozone crisis may affect exports; (2) Fall in rice exports due to uncompetitive prices; (3) Inflation, estimated at 3.5%, is due to  Government income/consumption support policies, and reconstruction needs;  (4) The threat of floods, which may affect consumer and investor confidence. 
  • Thailand will need to be prepared in the event of the severe global economic slowdown by ensuring adequate fiscal space while quickly improving productivity and competitiveness of Thai exports.