Thailand has gained some strength in the third quarter of 2015, as the rise in exportation offset faltering demands on the local front. Data suggest that there's slight deceleration in the final quarter's growth. Back in October, exports had disappointing returns and manufacturing ended up with the steepest rate in nearly a year. It's therefore encouraging to see signs of recovery for the nation affected by China's economic woes.
Efforts to Invigorate the Economy
Here's the nitty-gritty with regards to Thailand's economic forecast for 2016.
Export Projection: There's a two percent expectation by the Thai private sector with regards to the country's exportation rate. This is at odds with the five percent projection of the nation's Commerce Ministry. As for the Thai Military Bank or TMB Bank, its research center predicts that exportation would rise for 1.8 percent in 2016.
GDP Growth: In 2016, the SCB Economic Intelligence Center forecasts about 2.5 percent to 3.0 percent growth. The EIC's previous quarterly prediction was prompted by the current slowing down of outside demand. Thai exports have been affected by the Chinese investment spending and manufacturing capacity decline, like many other nations in the Southeast Asian region.
Thailand and the ASEAN Region is Affected by China's Economic Woes: Thailand's major agricultural products showcase a trend towards depressed commodity prices. The country's major agricultural product exports are having issues from lowered demand in the ASEAN region due to everyone's economic dependence on China and the depreciation of currencies.
Tourism Might Be the Answer: According to Thailand's minister, 2015 foreign tourist arrivals totaled 29.88 million, which in turn generated billions of baht in profits. Therefore, it's the government's intention to use the tourism sector in order to keep the Thai economy afloat, projecting 2.41 trillion baht in tourism revenue for 2016, which presents a 4.7 percent increase from a previous target.
Government Stimulus Efforts: The main driver for Thailand's economy 2016 aside from tourism is government stimulus efforts. Thailand's steps to invigorate its economy include selling a million tons of rice to a Chinese food conglomerate, building an ambitious 900-kilometer railway, and signing several important deals with China back in December. As such, this is the economic outlook of the country at present.
The Stimulus Package: The Thai economic stimulus package also includes a bigger role for the public sector's economic policy in light of the negative outlook for exports. The package is set to provide liquidity for small and medium enterprises (SMEs) and farmers from the third quarter of 2015 up until the present time, with the intention of boosting domestic spending all throughout 2016.
The Bottom Line
The Thailand government is aware of its slowing economy and disappointing demand for its imports. Thusly, its administration is doing everything it could in order to stimulate local demand, support local businesses, and find other means of revenue (that is, tourism).
If things pan out superbly for the country, it should enjoy better growth rates in 2016 compared to 2015. At any rate, Servcorp is one of those businesses that can assist in stimulating the Thai economy in its own way. Its world-class virtual office and serviced office offerings should assist SMEs in establishing their operations without paying an arm and a leg for overhead. Please call +66 2 207 2600 for more information.