Economic Growth In Thailand

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Thailand has been one of the fastest growing countries in the world with a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand achieved steady growth due largely to industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. From 1951-2014, the average annual growth rate of real GDP was 6.5% per year. Per capita GDP has been increasing substantially during the past 50 years. Although Thailand does not abound with oil and ores, its abundance in other natural resources, such as timber and agricultural products, helped start its growth. Fifty years ago, Thailand was still a primitive economy whose main…show more content…
Capital endowment is a crucial factor in economic growth, and part of the massive output growth in Thailand during the past decades has been contributed by capital accumulation. Gross capital stock in Thailand has been increasing continuously over the past three decades. A massive capital accumulation started to take off in the early 1990s. From 1990-2010, the values of gross capital stocks in Thailand have increased by about three times. Some productivity improvements have been achieved, but these may have been through importing more efficient and modern machinery and through the employment of better or more productive workers”. It has been reported that the total factor productivity (TFP) explained only 16% of the real GDP growth during 1990-2008, while labor and capital contributed to the GDP growth for 46% and 37%,…show more content…
Important trading partners with Thailand include the U.S., the ASEAN (Association of SouthEast Asian Nations), EU, and Japan. The U.S. is the biggest market for Thai exports. However, there was also a change in the structure of exports worth mentioning. In 1992, the ASEAN countries signed the Free Trade Agreement (AFTA), aiming to reduce the regional trade tariffs to 0-5%. Consequently, the intra-trade within the Southeast Asia countries has expanded extensively. Since 1993, values of the exports to the ASEAN countries have surpassed those to EU and Japan. In spite of the slow down during the crisis periods, the ASEAN intra-trade picked up quickly in 2000. In 2002, the value of export to the ASEAN was about 580 billions bahts (13.5 billion dollars), accounting for 20 percent of the total exports. This figure is approximately equal to the export share to the U.S. In terms of the exported goods, the structure has also changed considerably. In early 1980s, 45% of the total exported goods were food products. However, the share of food products in exports is now replaced by machinery products. Currently, the exports of machinery products accounted for 43%, while food products account only for 14% of the total exports. Net foreign direct investment (FDI) in Thailand has been significant since the early 1990s. Partly this rise in FDI is due to the abolition of the capital controls over financial capital

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