Thai economy: currency, GDP, energy, industry, standard of living

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:39

Thailand is one of the largest countries in Southeast Asia. It is located on the Indochina Peninsula and in the northern part of the Malay Peninsula. This is the only country in the region where there was no colonial regime of European states. Thailand's economy is at an average level of development. However, it varies greatly in different parts of the country. The exchange rate of the baht (the national currency of the country) to the US dollar: 1/45.

Geographic features

The country has a shape elongated in the meridional direction. It stretches from north to south for a distance of 1860 km. Due to this geographical position and the diversity of the relief, the natural conditions in different parts of this state are quite different. The northwestern and northern parts are occupied by mountains. They are the source of food for large rivers flowing into the Gulf of Thailand.

Variety of conditions determines an important economic advantage of Thailand relative to neighboring states. Various types of tourism are developed here, agriculture is also diverse, which is distinguished by the presence of severalcrops per year.

Approximately 37% of the country's total area is covered by forests. In the northern part they are tropical deciduous, and in the southern part they are tropical evergreens. The highest point in Thailand has a height of 2565 m.

Climate

Climatic conditions are not very comfortable. Most of the year the weather is hot and humid. The hottest time is in April-May, when the thermometers reach +35…+40 °С. It is coldest in winter in the mountainous part of the country. The night temperature sometimes drops to 0, while the daytime temperature is quite significant: +25 °С.

The climate is monsoonal, with maximum precipitation in August - September. Their annual number is 1200-1600 mm, but in some places in the south and east - more than 4000 mm.

Thai Economy

In Thailand, both industry and agriculture are developed. However, the distribution of different sectors of the economy in terms of contribution to total GDP is not the same. Although a third of the economically active population works in agriculture, it accounts for about 1/10 of the gross domestic product. Industry provides approximately 36%, and the service sector - up to 56%. Tourism plays an important role in the economy.

Thailand has an expert-dependent economy, so it cannot be called closed. 2/3 of the country's GDP is associated with the export of products. Thailand sells cars and parts for them, agricultural products, including canned food, electronic products, computer components.

There are many banks in Thailand. In 2007, there were 3 statecommercial bank and 5 state specialized, as well as 15 Thai commercial and 17 foreign. The bank lending rate is 4.42% (for 2017).

Currency - baht. Course: 1 B=45 $. Currently, the country has a floating exchange rate regime for the national currency.

Thai industry

The main sectors of industrial production in this country are: mining, manufacturing and electrical industries. Mining gives a little more than 1.5% of GDP. The main part of the production is exported. The country plays a significant role in meeting the world's demand for tin, tungsten and gypsum. Natural gas is produced in certain quantities.

The country produces jewelry, automobiles, petrochemicals, textiles and food products.

The production of electrical appliances and electronic equipment is of particular importance in the Thai economy. In the manufacture of instruments alone, a total of 780,000 people are involved. The automobile industry employs 417,000 workers. This country is in second place in the world in the manufacture of hard drives. However, large companies are increasingly moving their production to neighboring countries, where labor is cheaper.

Energy

The country imports more electricity than it exports. In terms of electricity production, it ranks 24th in the world. With regard to the structure of the energy sector in Thailand, due to the constantcheaper renewable energy, as in most other countries, it is changing rapidly. In past years, ¾ of the generating capacity was accounted for by thermal power plants, mainly operating on natural gas. Hydroelectric power plants provided about 9% of the rated capacity, and other RES about 14%. At the same time, the share of RES will obviously increase rapidly.

Thailand has few oil deposits (only 396 million barrels), so most of the oil is imported. As for gas, most of the consumed volume is associated with its own production, which is carried out from the bottom of the Gulf of Thailand. The missing volume is imported from Qatar.

Income level

Wages in Thailand are gradually rising. In 2017, the minimum wage in this country was equal to 9 US dollars per day, and in 2019 it was already 10.2 US dollars per day. However, in terms of paying taxes and participating in social events, the people of Thailand are far from being as ideal as those in the United States. The shadow sector of the economy, which is one of the most developed in the world, is very developed here. It reaches 41% of real GDP. Thailand's income distribution is uneven.

Agriculture

Thailand has traditionally been an agrarian state. Therefore, until the 1980s, most of the country's inhabitants were employed in the production of agricultural products. The country is one of the world's largest exporters of rice, and for a long time held the lead in this indicator. Sugar cane, corn, rubber, soybeans, coconuts, palm oil are produced in smaller quantities.

The timber industry is also quitedeveloped. Forests occupy approximately 37 percent of the total area. A significant part of them is located in protected areas. The remaining areas are being harvested.

The area of irrigated land is 64,000 km², and all agricultural land covers 41% of the country's territory. Mostly agricultural crops are grown. The share of pastures is small.

Another important branch of agriculture is seafood. The country is in third place in the world in the export of such products. Shrimp are the most important. A lot of fish are also caught. The industry employs over 300,000 people.

Transportation

The transport system is at an average level of development. The railway network is well developed. The total length of railway tracks is 4127 km. They are mostly narrow gauge. However, even on them you can drive at a speed of 100 km / h. There are both passenger and cargo transportation. The latter are dominated by containers.

The total length of roads is 180 thousand km. The length of the tracks of the modern level is 450 km.

River vessels play a big role in transportation. The total length of river transport routes is 4,000 km.

Tourism

The role of this industry in the country's economy is higher than in any other Asian country. Beach holidays are especially developed. The diversity of nature and relief, a large number of forests make it possible to develop the tourism industry in different parts of this state. The most visited cities are: Phuket, Bangkok, Pattaya,Samui. In 2011, over 19 million tourists from other countries visited the country. The most important are the five tourist sites: the Royal Residence, the Giant Buddha Statue, the Elephant Sanctuary, Wat Rong Khun and the Similan Islands.

Regional specifics

The most economically developed region of the country, of course, is its capital - the city of Bangkok. It has much in common with Singapore and Kuala Lumpur, although it lags behind them in terms of development. Both in the city and in its environs there are many industrial enterprises, trade facilities, banks, transport hubs.

In general, the central region of the country (in which its capital is located) is the richest and economically stronger, compared to others. Its contribution to Thailand's GDP is disproportionately large. The most fertile areas of the country are located on the Central Plain. Rice, corn, cassava, sugar cane are planted there.

In northern Thailand, farming opportunities are constrained by mountainous terrain. Land suitable for planting is found only in river valleys. Traditionally, logging was carried out here, as a result of which the forest potential has noticeably decreased. Now logging is mostly prohibited.

The northeastern region is the most backward. It has a drier climate and low soil fertility. Despite the measures taken to improve welfare, problems remain.

The southern part of Thailand has wide access tothe sea. Fishing is practiced here, trade is well developed. Mainly tin and rubber are produced.

Conclusion

Thus, Thailand's economy is gradually moving in the direction from agricultural to industrialized, with a high proportion of intelligent technology. The degree of its development in different regions varies. The standard of living of the population of Thailand is growing, but so far it is not very high, and the distribution of income among the population is uneven.