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Thailand Economic Prognosis for 2014

Jan 29, 2014 | Valerie Wong

For those who believe that the economic prognosis for Thailand is less than satisfactory, they should take a more objective look at the happenings as well as the fact that things could be much worse in light of the political tensions and the ongoing recession of sorts. At present, Bangkok is a place where thousands of protestors against the government are relying in order to go about a standstill. As for the government, it's able to function regardless by using buildings on the outskirts of Bangkok, but those who are stuck in the middle of the city truly have experienced somewhat of a halt in business.

Regardless, the protests aren't bloody, and are in fact quite festive. The government has downplayed the protests, but people like the John Crawford, professor of agricultural economics, Peter Warr of the ANU, believe that the protests are much bigger than the government lets on. In terms of economic growth, tourism, and investor confidence, everyone seems to have a "wait and see" attitude when it comes to the entire protest debacle. Analysts predict a 3% growth rate for 2014. At any rate, many tourists are changing plans and going for a Thai beach holiday instead of staying in the city, which in the bright side still has them visiting Thailand regardless.

The Economic Implications of the Protests

In a nutshell, the economic implications of the protests are as follows. Tourism will be affected, thus laying ground to a domino effect on the economy because of how important tourism is to the country. In 2013, 27 million tourists visited the city, plus the winter season serves as an important "high season" for Thailand's tourism industry. With that said, Thailand's tourism authority has a different take on the happenings. While there are alerts about potential road blocks in Bangkok, they insist that the city is open for tourist business as usual. In that manner, they're taking the "Keep calm and carry on" approach towards the political intrigue.

The protests have lasted 70 days so far, which includes attempts to shut down Bangkok altogether. There's both optimism and worry across the board, although protests remain peaceful if somewhat bad for business. The Bangkok-based Asia Foundation's chief economist, Veronique Salz-Lozac'h, also points out that things could've been much worse—an outright disaster, even—considering the long-term impact of the protests on the economy. Bangkok is still bustling and companies are still working as usual (thanks in part to virtual office solutions that allow for continued business transactions). However, it's believed that the longer the protests go, the weightier its effects will be.

What's In Store for Thailand in 2014

Thailand is a resilient country in that even in the face of a political crisis of sorts, it's still projecting growth for 2014 instead of a net loss and a plummeting economy. Furthermore, Prime Minister Yingluck Shinawatra, despite his October 2013 bill that would've allowed the return of his brother and offered amnesty to past offenses dating all the way back to 2006 (one of the reasons for the protests), is doing quite a lot in jumpstarting the economy, from boosting local demand and spending 350 million baht on water management projects as well as 2 trillion baht on infrastructure (these are on hold at present, though). Regardless, Thais continue to adapt and showcase versatility.

Despite the ongoing Bangkok protests (or perhaps because of it), souvenir sellers, fast food sellers, home delivery services, and mobile phone companies are actually doing a roaring trade thanks to the demonstrators. What's more, as expected of a rising tiger of Southeast Asia, even when compromised, Thailand remains a land of employment opportunity. The reason why it's still projecting a 3% growth in spite of the turmoil and a lackluster 2013 economy is because of its rich, solid job market that accommodates quite a number of expatriates and its 1% unemployment rate. Compare that to the United States and its ongoing economic recession and slowdown, which continues to have work opportunities that couldn't accommodate both domestic and foreign workers.

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