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Thailand – Trade Policy


Statistics recorded by the Office of the National Economic and Social Development Board (NESDB) show that in 2012, Thailand's GDP increased by 7.3% from 2011 and then slowed down to 2.8% and 0.9% growth in 2013 and 2014 consecutively. In the first quarter of 2015, the economy grew by 3.0% from 2014 and is forecasted to grow by 3.0%-4.0% for the entire year of 2015. Main factors contributing to the first quarter's growth are private consumption expenditure, government investment, and export of services. On the production side, nearly all sectors have improved, especially construction, hotel and restaurants, transportation, and industrial sectors. Unemployment rates were steady at approximately 0.7%-0.8%.

Fiscal Policy Office, Ministry of Finance, in July 2015 forecasted Thai economy in 2015 to expand 3.0% (or within a range of 2.5-3.5%), higher than the previous year of 0.9%. The key factors will be public spending, especially the infrastructure investment, undisbursed central fund, increasing state-owned enterprises' capital expenditure disbursement, and the Government's higher capital expenditure budget framework. Meanwhile, external demand is expected to improve as the political situation returns to normal, resulting in the higher number of foreign tourist arrivals. However, export growth is still subject to uncertain global economic recovery. Private consumption and investment, on the other hand, are expected to regain their momentum following the overall economic recovery and clear government policies.

The growth rates of Thailand's total external trade value during 2012-2014, showed a promising sign in 2012, when trade grew by 5.95%; however, in 2013 trade slowed down with a minute growth rate of 0.14% and at end of 2014 shrank by 4.94%. In 2014, the total trade value amounted to Us$455.27 billion, with exports accounting for Us$227.52 billion and imports at Us$227.75 billion. Compared to 2013, exports reduced by 0.43% while imports decreased by 9.05%.

During 2013-2014, Thailand's top three major trading partners were China, Japan and the United States approximately at Us$64.3, Us$60.3, and Us$38.0 billion. If counting all ASEAN member States together, trade value between Thailand and its ASEAN counterparts would amount to Us$100.8 billion, approximately 21.6% of Thailand's total external trade. Major exports by value are motor cars and parts, automatic data processing machines, jewellery, polymers of ethylene, propylene etc., refine fuels and rubber products. Major imports by value are crude oil, machinery and parts, electrical machinery and parts, chemicals, iron and steel products, and electronic integrated circuits.

Besides merchandise trade, trade in services also played an important role for the Thai economy, contributing 29.36% of GDP in 2014, a growth from 29.34% of GDP in 2012. During the same year, total trade in services registered at Us$109.76 billion, with import of services valued at Us$52.89 billion and exports of services at Us$56.87 billion.

Inflows of foreign direct investment were on the rising trend from 2011-2013 but decreased from Us$14,416.0 million in 2013 to Us$12,825.6 million in 2014. Japan, the European Union and the United States remained Thailand's top originating countries. In 2014, 25%, as the largest proportion, of FDI inflow was for manufacturing sector, especially in electricity, gas, steam and air conditioning supplying, and transportation and storage. On the other hand, outflow of foreign direct investment arose from Us$7,175.8 million in 2011 to Us$14,260.6 million in 2012. Afterward, the outflow decreased from 12,276.1 million in 2013 to Us$7,865.8 million in 2014. During 2011-2014, ASEAN was the top destination of Thailand's outflow investment. In 2014, the main proportions of outflow are in the mining and quarrying (34.3%), financial insurance activities (18.0%), and manufacturing (16.9%) sectors.

Headline and core inflations are expected to remain low in 2015 to be 0.9% and 1.2%, respectively. The low and stable price level would play a supporting role for domestic spending.


Overall Economic Policy under the Current Reform

Out of the key 11 areas under the Policy Statement of the Council of Ministers delivered to the National Legislative Assembly, two areas focus on matters relating to economic and trade developments: enhancing Thailand's economic potentials and promoting Thailand's role and exploring opportunities in the ASEAN Economic Community.

In order to enhance the country's economic potentials, three phases of implementation are being carried out: (1) in the immediate term where prompt action is required, including speeding up the utilization of and ensuring efficient spending of the outstanding capital budget of the fiscal year 2014, preparing a thorough plan for the fiscal year 2015 for concrete and efficient outcome of the annual budget under the transparency and non-discriminatory principles, and stimulating investment and undertaking necessary infrastructure investment projects; (2) in the intermediate term in which outstanding fundamental problems are to be addressed, including coordinating monetary and fiscal policies to support economic recovery while maintaining price stability, reforming fuel price structure, management of the public debt, and improving tax collection; 
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