Rice cultivation is the basis of the Thai economy. It is the enterprise that
empowers the Thai people and culture to prosper. There is much more now to the
Thai economy besides rice but rice was the keystone for the economy and till
late the controlling industry. Rice growing and all other agricultural
industries, including forestry and fisheries, make up one sixth of total
economic yield. Manufacturing and domestic trade both amounts to more than that,
about one fifth of GDP.
Economic growth in Thailand, while in the last three decades, has been led by
increase in its external sector. From 1961 till recently, Thailand has recreated
itself from an agricultural economy to an industrial economy, which is reflected
in the share of industry in GDP flourishing to nearly 40%. Despite these
efforts, the Thai economy experienced an urgency situation during 1997, mainly
due to scarcity of satisfactory security in the financial system.
In 2001, the Thai economy grew at a rate of 1.8 percent, related to a 4.6
percent growth rate in 2000. The slack in the Thai economy was chiefly ascribed
to the conflicting impact of the phlegmatic world economy, since exports, which
accounted for more than 60 percent of GDP, contracted by 6.9 percent. While the
growth rates of private consumption and private investment were 3.4 and 5.1
percent, respectively, the growth rates of public consumption and public
financing were 1.6 and -6.6 percent.
Private consumption is anticipated to grow at a rate of 3.5 percent, compared to
3.4 percent in 2001. Higher consumer dependence and a low interest rate
atmosphere will be the primary confirming factors for raised private consumption
in 2002. Private investment is anticipated to grow at a rate of 5.8 percent,
just higher than that of 2001. Construction will be a key driving impetus for
private investment, as an effect of the government policies to provoke the real
estate sector and a low interest rate surrounding. It is also foreseen that
investment in machinery and equipment will accumulate up in 2002 though to a
lesser extent since excess production capacity still command in many sectors of
the economy.
The Thai economy is anticipated to increase at a rate of 3.5-4.0 percent in
2002. The retrieval of internal and external demand will play a significant part
in correcting the economy. Private consumption and investment are expected to
keep up expanding, fundamentally due to the recovery of business and consumer
faith and a low interest rate environment, as well as competent government
policies. Furthermore, the world economy has recovered faster than hoped for; as
a result, this has greatly accelerated Thai exports. In 2002, monetary policy is
also presumed to play a more consequential role in stirring the economy. Since
inflation is expected to stay low, the policy interest rate is likely to remain
at a low level to constantly activate domestic requirement continuously.
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