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Thailand’s Economic Situation in the Second Half of 2013

September 11, 2013 Destination Thailand No Comments Email Email

Prime Minister Yinluck Shinawatra believed that the Thai economy in the second half of 2013 would improve in the face of global economic volatility.

In the weekly program “Yingluck Government Meets the People” on 7 September 2013, the Prime Minister said that developed countries, such as the United States, Japan, and European Union nations have experienced an economic slowdown, while Asia, particularly ASEAN, is enjoying higher growth.

She said that quantitative easing measures led to excessive capital inflow and the stronger baht in recent months. The capital inflow was in the form of investment in the Thai capital market and bonds. The question is how the Government will bring the capital inflow into investment in the real sector.

The Prime Minister stressed the need to follow up on the use of modern technology and research and development on technological promotion and the changing behavior od consumers. Thailand should also reap benefits from tax privileges under free trade agreements.

She explained that 70 to 80 percent of Thailand’s economy depended on exports. As the country’s major trading partners have faced economic problems, Thailand has turned to focus more on the domestic economy. Since this is a transitional period, people have seen Thai exports on the decline. The Government is adjusting the balance between the growth of export and domestic earnings.

According to the Prime Minister, there are two kinds of government expenditure. The first one involves regular spending and the second one involves investment. The Government is accelerating public sector spending in time for the third and fourth quarters of 2013. Foreign investors are more willing to invest in Thailand, as well. One of the reasons is that the Government has reduced corporate tax from 30 percent to 20 percent.

Concerning ASEAN, she said that the Government was making efforts to reduce various obstacles to exports to neighboring countries and trade along the borders. The Ministry of Finance has worked out measures to help promote investment and border trade.

She believed that Thai exports in the second half of 2013 would be higher than in the first half. The country’s tourism is also showing a positive trend, as tourist arrivals are expected to reach over 22 million this year.

Prime Minister Yingluck is now on a visit to Switzerland, Italy, the Vatican, and Montenegro from 8-15 September to strengthen trade and investment. Accompanying the Prime Minister are 50 members of the business sector engaged in 10 fields of business. Her visit to Switzerland will be the first in 23 years for a Thai prime minister.

In Switzerland, she will address the 24th session of the United Nations’ Human Rights Council (UNHRC) in Geneva. The Prime Minister will sign a memorandum of understanding with Italy on cooperation in small and medium-sized enterprises.

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