Export sector the main hope for GDP growth according to economist
The crystal-ball gazing of economists is, if past examples are anything to go by, hardly a precise science. Partly, of course, this is because world events can change circumstances to such an extent that no amount of clinical data and forward projections can predict the future with certainty.
So, it’s no surprise that while a leading economist with Thammasat University suggests exports will be the key economic driver for the forseeable future, he is hedging his bets by making it clear that even if Thailand eventually manages to overcome the long-running political impasse and install a functional government, the country lacks competitiveness in terms of education and innovation. This is in spite of a pretty strong infrastructure compared to many of its regional neighbours.
On the positive side of the predictive ledger, Thailand is aiming for and expecting gross domestic product (GDP) to rise by between 2.5 and three percent in 2014. This will largely be brought about by strong growth in exports.
Export growth, according to Thammasat, is predicted to be in the realm of five to six percent, all on the back of stronger economic situations in China, Japan, Europe, and the United States.
The two key factors which may militate against this expected growth level are Thailand’s current account deficit and lower than expected growth in the Chinese economy.
A spurt in the current account deficit could easily spook foreign financial investment in Thailand and leave the financial markets struggling.
More importantly, perhaps, is the economic situation in China. At this stage, the predictions are that China’s economy will grow by as much as 7.5 percent this year. If this does not come to pass then Thailand’s export figures will be dampened as well.
In other words, despite all the figures being bandied about, no one really knows what the end result will be with any more certainty than an amateur gazing at a crystal ball.
One sector where a measure of sensibility has crept in is in the predictions regarding tourism numbers for this year. At the start of 2014 the Ministry of Sports and Tourism suggested numbers would jump by 13.3 percent on the 2013 figures and Thailand would host 30.3 million overseas visitors.
Tourism is a major component of GDP, currently generating about 11 percent, but saner heads have been allowed to look at the real figures and the Fiscal Policy Office (FPO) of the Finance Ministry has let it be known they believe the 13.3 percent growth figure in tourism is unlikely. After all, February saw a substantial 18 percent drop in tourist numbers travelling through Suvarnabhumi airport, and this drop is likely to continue for a few months yet.