According to Trading Economics global macro models and analysts, Thailand’s GDP is predicted to reach $546.00 billion by the end of 2021. According to our econometric models, Thailand’s GDP will trend at 549.00 USD billion in 2022.
What accounts for Thailand’s low GDP?
Thailand has made extraordinary social and economic improvement over the last four decades, shifting from a low-income to an upper-middle-income country in less than a generation. As a result of its continuous strong growth and substantial poverty reduction, Thailand has become a widely acknowledged development success story. Thailand’s GDP grew at an annual pace of 7.5 percent during the golden years of 1960-1996 and 5% following the Asian Financial Crisis from 1999 to 2005. This expansion resulted in the creation of millions of jobs, allowing millions of people to escape poverty. Gains have been substantial across various dimensions of welfare: more children are getting more years of education, practically everyone now has health insurance, and other types of social security have expanded.
Economic growth has declined in recent years, from 4.2 percent in 2018 to 2.4 percent in 2019. Weaker export demand, reflecting the impact of US-China trade tensions, slower public spending, and a drought, which impacted agricultural productivity, were the main factors of decreasing GDP. Thailand’s future growth is likewise threatened by key development hurdles if it is to achieve high-income status by 2037. These include insufficient educational outcomes and skill matching, which jeopardize future productivity and opportunities for the younger generation, as well as growing spatial inequality, with remote places lagging in economic and welfare metrics.
In 2020, Thailand was hit by the COVID-19 epidemic, which had a devastating economic impact, resulting in widespread job losses, hurting both middle-class and poor households, and jeopardizing hard-won poverty reduction gains. Poverty increased to 6.4 percent in 2020 as a result of COVID-19, resulting in an additional 200,000 people slipping into poverty. After falling dramatically over the previous three decades, from 65.2 percent in 1988 to 6.2 percent in 2019, the rate of poverty reduction has slowed in recent years.
Thailand’s economy shrank by 6.1 percent in 2020, owing to a drop in external demand, which harmed trade and tourism, supply chain disruptions, and declining domestic consumption. The economy grew by 2% in the first half of 2021, despite the third wave of the COVID-19 pandemic, and is not anticipated to recover to pre-COVID-19 levels until 2023, after experiencing its worst recession since the Asian financial crisis in 2020. The COVID-19 epidemic has posed a number of additional labor market concerns. The main effect has been an increase in the unemployment rate. There were 710,000 fewer jobs in the first quarter of 2021 than the previous year.
Thailand’s governmental reaction to the COVID-19 epidemic has been to boost economic activity and protect the livelihoods of the most vulnerable, with a 1 trillion baht package (about 6% of GDP) earmarked for cash transfers, medical response, and economic and social rehabilitation. New large-scale cash transfer initiatives have been launched to help vulnerable groups that would otherwise be left out of existing social assistance programs.
It is anticipated that if the government’s compensation plan had not been implemented, poverty would have risen to 7.4%. The recovery has delayed because to a fourth wave of COVID-19 in 2021, with vulnerable populations bearing a disproportionate impact. Slow vaccination rates and high levels of vaccine apprehension could stymie economic recovery and halt poverty reduction initiatives. To achieve an inclusive recovery and re-ignite poverty reduction efforts, legislative goals should include enhancing social assistance programs for vulnerable communities and addressing vaccine reluctance while increasing immunization coverage.
“Inequality” is one of the primary obstacles inhibiting the country’s sustainable development and objective of becoming a high-income country, according to the National Strategy. Thailand has one of the largest wealth concentrations in the world, with the top 1% owning over 58 percent of the country’s total wealth. Intergenerational inequality occurs when wealth discrepancies pass down over generations, as well as disparities in education (both quality and completion rates), unequal access to skills needed to obtain greater incomes, unequal access to credit, and legal discrimination. Inequality manifests itself in the social exclusion of marginalized groups such as migrants, domestic workers, LGBTI people, people with disabilities, and ethnic minority groups, and it is the root of a slew of structural issues in Thai society, including human trafficking, crime, corruption, and social and political instability.
Climate change and vulnerability pose a threat to Thailand’s long-term growth and prosperity. Thailand is one of Southeast Asia’s major greenhouse gas (GHG) polluters. GHG emissions have increased dramatically as a result of long-term sustained economic expansion combined with a relatively high energy intensity. Natural disasters are becoming more frequent and intense as a result of climate change. Aside from the loss of productive activities, the destruction of key infrastructure has a severe impact on the Thai people’s well-being and possibilities, particularly for disadvantaged groups. The 2011 flood demonstrated the degree of the economic and social harm that natural catastrophes may do in Thailand.
Thailand is known for its universal health care program (UHC) and achievement in child feeding, but the country’s human development remains hampered by a lack of educational quality. Social assistance programs are disjointed, with unmet potential to update benefit packages and increase efficiency. Thailand’s 2020 Human Capital Index (HCI) of 0.61 suggests that a kid born today would have future productivity that is 39% lower than what may be achieved with complete education and good health. According to the Index, the country ranks high in terms of schooling quantity (expected years) and the percentage of children who are not stunted, but poor in terms of education quality (as evaluated by harmonized test results).
What is Thailand’s most important industry?
Thailand’s growth is mostly driven by exports and tourism. In 2018, the tourism industry rose by 7.5 percent, while exports increased by 7.2 percent. Automobiles and electronic items, as well as agricultural products such rice, rubber, sugar, and tapioca, are the country’s main exports.
What causes Thailand’s poverty?
Thailand, despite being seen as a development success story, is still classified as a developing country. Between 1980 and 2015, Thailand’s poverty rate dropped from 67 percent to 7.2 percent. However, from 2005 and 2015, the country’s growth dropped to an average of 3.5 percent. At the moment, 10.5 percent of Thailand’s population lives in poverty.
Why is Thailand so impoverished? Thailand’s poverty is due to its unbalanced development. Due to Thailand’s significant poverty rate in the 1960s, industrialization was emphasized as a means of boosting the economy. Although tremendous economic growth and poverty reduction resulted from this industrialization, development was not broad. Resources were centralized to promote industrial output in the capital and neighboring urban regions, starving rural areas. As a result, in 2014, 80 percent of poor individuals lived in rural areas.
The concentration of development in urban areas has resulted in a dearth of investment in Thailand’s rural areas. Bangkok, for example, is home to barely 10% of Thailand’s people yet generates more than half of the country’s GDP. Rural areas have a poverty rate of 13.9 percent, compared to 7.7 percent in urban areas, highlighting the disparity.
In response to the question, “To answer the question “Why is Thailand poor?” one must consider the discrepancy in development between urban and rural areas. Rural poor individuals have limited access to public resources that could help them get out of poverty. Rural poor people must be able to afford both the service and transportation to urban regions in order to acquire access.
A good example is education. Many rural poor individuals cannot afford to continue their education beyond the compulsory six years. The rate of enrolment for “In rural areas, 18 percent of people have completed postsecondary education, compared to 39.5 percent in metropolitan areas. Many rural poor individuals are underqualified for higher-paying jobs due to a lack of education, sustaining a vicious cycle.
Thailand has designed a 20-year economic strategy to bring the country up to developed country status, in acknowledgement of the imbalance. Economic stability, equal economic opportunity, competitiveness, and effective government bureaucracy are all goals of the reforms. Thailand must overcome the constraints to growth in rural areas and maintain widespread growth to achieve its goal.
Despite its development success, Thailand’s poverty highlights the need for more research into poverty eradication. Approaches to eradicating global poverty should take into account the problem’s complexity.
Is Thailand a developing country in 2021?
We didn’t start calling countries the First, Second, or Third world until after World War II ended. As the globe entered the Cold War, nations formed opposing sides around the two new Super Powers, the United States and the Soviet Union. The West’s democratic, capitalist countries and the former Soviet Union’s communist countries began a decades-long confrontation.
Political scientists, universities, and governments began to divide countries into groups, and the “us versus them” approach gained traction.
We’ll take a quick look at the Three Worlds paradigm, which was popular during the Cold War.
Second World Countries
The Soviet Union, which was made up of Russians and 14 former communist countries brought under Russian rule after World War II, was one of the Second World Countries.
Third World Countries
Alfred Sauvy, a French demographer, created the term “third world” in 1952. The Third World countries in this paradigm were any country that wasn’t in the first two groups. It included democratic, communist, capitalist, wealthy, and impoverished countries. A far cry from what we imagine when we hear the term “third world country” nowadays. (Source)
Thailand would be classified as Third World according to Alfred Sauvy’s concept. But, as we’ll see, the term has developed over the last 60 years, and that’s far from the end of the story.
How did Thailand get so rich?
It is mostly due to land and real estate interests. The monarchy holds roughly 40,000 rental contracts, and a survey of its wealth in 2015 revealed that it is one of the country’s greatest landowners.
Why is the king of Thailand so rich?
According to a recent assessment by the Taxpayer The King, the King’s real estate portfolio is worth at least $30 billion. In addition, the King holds a 23 percent share in Thailand’s largest lender, Siam Commercial Bank, as well as a 33 percent stake in Thailand’s largest industrial conglomerate, Siam Cement Group.
Is Thailand’s economy booming?
Thailand has made significant economic and social improvement during the last several decades. Thailand has progressed from a low-income country with a strong urban center to an upper-middle-income country with a fast modernizing economy. Economic success has resulted in significant social progress. Poverty has decreased, and education and health services have significantly improved. These successes have catapulted Thailand into a new era, along with new obstacles.
The country’s rising prosperity hasn’t been evenly distributed, and economic reform requires a boost. Precarious employment still accounts for more than half of the working population. The emergence of new industries to replace low-productivity ones has halted, and rural migrants and the impoverished in metropolitan areas lack the skills needed for modern urban occupations. While Bangkok’s success as a metropolis has been critical to Thailand’s transition, the country also requires strong secondary cities that can establish new sources of growth.
Experience has shown that development is more about getting what matters right than having everything perfect. This Multi-Dimensional Review’s Initial Assessment aims to identify the problems and main restrictions that Thailand must overcome in order to succeed. It makes recommendations on informality, productivity, and natural resource management, particularly water management.
Press release: Although significant economic and social progress has been made, structural changes are required to create more high-quality jobs and address regional disparities.