Thailand : between economic growth and financial crisis

Thailand : between economic growth and financial crisis

Known especially for tourism, from golden beaches to the south, to the northern tropical forests, Thailand is also a modern industrial country that finds its strength in the fields of mechanics and electronics.

Many other great actors have understood the strategic importance of the territory, not only geographically, but of its business opportunities. It is not a coincidence that Japan, the third largest economy in the world, has made Thailand its regional hub.

The strength of the economic system and the ability of the country to attract foreign investment is easily observable by the magnitude of its economy (PIL). At position number 31 globally, above other major companies such as Denmark, Finland, Malaysia and Portugal, just to name a few.Pil continues to grow and finds strong support in Bank of Thailand’s monetary policy choices (the central bank), which has always proven to be able to keep a balanced economy with high growth rates. Despite the succession of different governments, with different visions, fiscal policies have always been favorable over the years, focusing on the construction and upgrading a modern and efficient infrastructure system which now give Thailand a big competitive edge compared to other countries in Southeast Asia.

 

The strongest country among the ASEAN block

A prominent player in the area, among the five founding countries and among the most active in the ASEAN block (Brunei, Cambodia, Philippines, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam), Thailand offers a number of advantages to companies which want to take part in the growth in these emerging markets. But the horizons of Thailand extend far beyond the stipulation of multilateral treaties signed by ASEAN with various countries such as Japan, China, Australia and New Zealand. Thanks to a series of bilateral agreements, the accessible market amounts to 3,400 million people. Recent policy divergences in recent years do not seem to have had a significant impact on business activity and, from this point of view, investor confidence remains high.

 

Financial and economic problems to deal with

 The real problem of Thailand seems to be the crisis in international markets. The strong dependence on exports makes the country vulnerable to depressive times in foreign trade and global demand for goods. To this, we need to add the growth of trading companies that, strong in the absence of internal regulations, take advantage of the situation to cheat investors. In order to attract a greater flow of foreign investment, it may be helpful to review the restrictions imposed on foreigners. Restrictions which in some way limit the competitiveness and, consequently, the efficiency of the production system. It is also important to facilitate access to the market with a range of tariff barriers. In this regard, the signing of a free trade agreement between Thailand and the European Union will be of helpful to European regular companies.

 

 

Could the current economic crisis, which is defined as a global one, create for Thailand a new normality?

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