Agriculture is the primary means of employment, but industry, commerce, and services account for the 80% of the gross domestic product.
Thailand is one of the world's largest producers of rice, and this accounts for much of the country's agricultural output.
Bangkok is a major centre for the cutting and trading of gemstones, as well as the production of high quality gold and silver jewellery.
In the last few years electronics, computers and integrated circuits, have become a major export earner and look set to play and increasing role in the future.
Oil refineries, chemical plants, steel mills and similar industries are mainly centered around Sri Racha (30km north of Pattaya) and Mab ta Phut just east of Rayong.
2002 and the future
The Prime Minister's bold announcement to upgrade the country's economic growth forecast to 4.5% for the next several years raised scepticism at first. However strong domestic consumption has has enabled to government to take credit for its "dual track" policy aimed at strengthening the internal economy simultaneously with exports.
Conventional wisdom among local economists suggest that Thailand needs a sustained growth of at least 5% over several years to be able to service the public debt and to prevent the total debt escalating beyond serviceable levels.
Key off-budget spending programmes, such as the Village Fund have been almost completely disbursed, with around 74 billion Bahtout of 80 billion Baht, injected into the grass roots economy.
Thailand has a total of 62 state enterprises, excluding two independent state enterprises and three state owned banks. At the end of fiscal 2001 the total assets of the state enterprises were 5.6 trillion Baht, with liabilities of 5.1 trillion. Revenues totalled 1.3 trillion Baht with net profits of 136 billion Bahtin 2001, compared with revenue of 1.38 trillion and profits of 77.4 billion the year before.
State enterprises posting the highest profit performance in 2001 included PTT plc, with profits of 18.6 billion Baht, followed by the Electricity Generating Authority of Thailand at 16.2 billion and the Telephone Organisation of Thailand at 13.2 million. Agencies with the highest losses included the State Railway of Thailand, Bangkok Mass Transit Authority and Bangchak Petroleum.
In the manufacturing side of the public sector electronic products, television and radio sets, iron and steel and automotive parts were star exports in 2002. These industries, along with the beverage industry and vehicle manufacturing were key engines for growth in 2002.
Interest rates are expected to remain low throughout 2003, benefiting investment and consumption. Low inflation is expected to be an impetus for economic recovery by reducing business's operating costs.
The main risk factor for 2003 is not domestic issues, but rather the global economy and the potential impact of a US-Iraq war.
Foreign reserves and debt payment
The government plans to repay ahead of schedule the $4.8 billion owed to the International Monetary Fund and other agencies, which was borrowed during the 1997 economic crisis. Three payments to $1.6 billion each will be made, starting in January, with total repayment within 6 months. The early repayments will save on interest costs, estimated at $120 million, and help boost the confidence of foreign investors in the Thai economy. Under the original loan schedule, repayment due to the IMF must be paid by June 2004, and to the IBIC by May 2005.
After the repayment the country's foreign reserves will remain at a healthy level.
The impact of a US-Iraq war is expected to be minimal. A war would result in higher oil prices and slowing trade, with a cost of $2 billion to reserve levels.
Thailand's once hard hit property sector has experienced a steady recovery for two straight years, particularly in the middle class residential market. Developers are confident that the market will remain steady and and not slum over the next few years.
The big improvement in 2002 was due to several factors, including low interest rates, strong domestic consumption, limited supply of new quality products and government tax measures to further stimulate the property market. Low interest rates are attractive for home buyers because with every one percentage point reduction the affordability of a a monthly instalment improves by 7% Prospective home buyers, as a result, can now afford to buy bigger houses. Given mortgage payments of 5-6%, a buyer would pay an instalment between 5,700 – 6,000 Bahta month for a house priced at one million Baht, according to a survey conducted by the Government Housing Bank.
The Bangkok Office sector has been struggling due to oversupply, but the market improved marginally during the first 9 months of 2002.
Bangkok's International Suvarnabhumi Airport is now complete and was opened for business in late September 2006. All domestic and international flights now arrive to and depart from the new airport. The airport is located in Racha Thewa in the Bang Phli district of Samut Prakan province, 30 kilometers east of Bangkok.
The airport has 2 runways which can accommodate simultaneous departures and arrivals. It has a total of 120 parking bays and 5 of these are capable of accommodating the Airbus A380 aircraft. The airport can handle 76 flight operations per hour and 45 million passengers plus 3 million tonnes of cargo per year.
Between the airport hotel and the terminal building are the two 5-storey car park buildings with a combined capacity of 5,000 cars. Above the underground rail link station and in front of the passenger terminal building is the 600-room hotel operated by Accor Group under the Novotel Suvarnabhumi brand.
Thailand's retail sector witnessed a sharp increase in new investment with both local and foreign players in 2002 despite uncertainty and cautious consumer spending. The retail sector has been active throughout the year while protests from small local retailers against national discount stores were growing. However foreign retailers shrugged off the protests and continued to open stores nationwide.
Discount store chains such as Tesco Lotus, Carrefour, Big C and Makro have developed 15 new outlets in 2002, adding to 102 outlets already in operation. Convenience store 7-Eleven has also added another 300 new stores.
The biggest retail development is Siam Paragon, a joint venture between Bangkok Intercontinental Hotels Co (BIHC) and the Mall Group. The luxury shopping project, worth 10 billion Bahtis due to be built on the site of the former Siam Intercontinental Hotel, in the centre of Bangkok. TOP
Major retail operators
Several changes in Thailand's telecommunications industry, both in the private and public sectors were seen in 2002, but some things never change: the National Telecommunications Commission, two years overdue, is no closer to reality. The absence of a powerful, independent industry regulator, mandated in the 1997 constitution, has resulted in a policy vacuum at a time when the fast changing needs a clear sense of direction.
The most significant change in the public telecom sector has been in the movement to corporatise and privatise the two state telecom agencies. The Telephone Organisation of Thailand is well on its way, but the process of privatising the Communications Authority of Thailand has proved more difficult.
The mobile phone market has grown beyond expectations, reaching nearly 18 million users, more than 70% of them on low margin pre-paid plans, by the end of 2002. At the end of 2001 the country has 7.7 million subscribers.
While the subscriber numbers soar, industry executives endure sleepless
nights amid concerns that the market is reaching saturation. The projections
for 2003 are 20 million subscribers, with a 32% penetration. The big
operators insist that this is too pessimistic, with a lot of energy
and investment chasing just 2 million new subscribers.
The three main operators are hoping to head off further competition from two newcomers: Thai mobile, a joint venture between TOT and CAT; and the CDMA IX service operated by Hutchinson CAT Wireless Multimedia, a joint venture with of Hongkong based Hutchinson. TOP
Thailand's thirst for energy, both for petroleum products and electricity, returned with avengance in 2002, fuelled by economic recovery, rising transport usage and growing demand in the industrial and commercial sectors.
Rising oil process, especially in the third quarter, spurred by the threat of a US-Iraq war, did not deter the upswing in domestic oil and gas demand, which was poised to record an average growth of 6% year on year, to the equivalent of nearly 6 million barrels of oil per day Giving an extra push to the demand for motor fuel was the Thai's love affair with cars, with some 400,000 new vehicles entering Thailand's road system in 2002.
Relatively stable power tariffs were expected to contribute to an almost 5% rise in national electricity consumption.
On the policy front, a new Energy Ministry came into existence in 2002 with the promise of better administration of the country's energy affairs.
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