Economic confidence rising with growth prospects for 2016
Recent improvements in the economy’s performance and stronger growth prospects for 2016 helped push industrial sentiment and consumer spending higher in the closing months of this year, as the government made firm plans to begin construction on major infrastructure projects and reap the benefits from increased trade and investment with the recent launch of ASEAN Economic Community.
Both the Bank of Thailand and the National Economic and Social Development Board have forecast that the economy will show solid growth of between 3 and 4 percent in 2016, with most private sectors economic analysts voicing similar views. As the second-largest economy among the 10 nations of the Association of Southeast Asian Nations (ASEAN), Thailand is a more mature economy than some of its less-developed neighbors that have begun to post higher growth rates. However, the Kingdom’s strategic location, more advanced soft and hard infrastructure and its business friendly track record ensure that it will remain vital to and a leader within ASEAN.
With decades of maintaining and increasing its economic openness and competitiveness, Thailand is well positioned to capitalize on freer trade and investment within the AEC and its market of over 620 million people. The same should hold true for trade with the new grouping’s partners such as China, Japan, South Korea, India, Australia and New Zealand. All have forged trade agreements with the AEC that will expand its reach and growth prospects.
Those improved prospects helped drive industrial sentiment among manufacturers in Thailand to a seven-month high in November, according to the Federation of Thai Industries. An FTI spokesman said that rising consumption and lower costs were making companies more optimistic. Consumers shared in the increased buoyancy, with the University of the Thai Chamber of Commerce predicting a record year-on-year jump in consumer spending of 6.4 percent over the New Year holiday.
Automobile sales, a significant indicator of consumption, increased for the first time in over two years in November, rising 4.6 percent from a year ago and up 12.5 percent on a monthly basis.
The stronger economy also resulted in the government taking in 1.8 percent more revenue during the first two months of fiscal year 2016, which began in October.
The Cabinet planned to use some of that increased revenue to support a sustainable higher-technology future, as it approved over $166 million in funding last week for projects designed to further develop the digital economy, with the funds split between the Finance Ministry and the Ministry of Information and Communications Technology (ICT).
Thailand was recently called the most dynamic nation in Asia in terms of digital development by the International Telecommunications Union of the United Nations, which also placed it among the most dynamic nations in the world.
The projects are aimed at improving the competitiveness of domestic IT firms, reducing the digital divide and inequality, enhancing the government’s Internet working process, increasing IT human resources, promoting e-commerce, and encouraging small and medium-sized enterprises (SMEs) to use electronic invoices for business transactions and other purposes.
“Further promotion of e-commerce has to be done as soon as possible, as the current number of online transactions via e-commerce between businesses and consumers in Thailand has already reached a value of around $58 billion per year, which is the highest in ASEAN at the moment,” said ICT Minister Uttama Savanayana.