Economic review Thailand

Economic review Thailand

The Netherlands Embassy in Bangkok regularly publishes economic reviews about Thailand, Thai-Dutch bilateral trade and investment and our business support services to Dutch companies. This is our review on the full year of 2018.

Thailand’s economic outlook is promising after posing a robust growth of 4,1 per cent in 2018, the highest in five years. The government is confident that the country’s economy is on track to further accelerate this year. The GDP growth for 2019 is forecast at 3.5 per cent average, supported by external factors, clearer investment recovery and improving domestic consumption.

Thailand’s economic performance in 2018 and outlook for 2019

According to the Thai Office of the National Economic and Social Development Board officially reported the Thai GDP in the fourth quarter of 2018 expanded by 4.1 per cent from the same period of 2017. In the third quarter of 2018 economic growth slowed down due to a decrease in demand of Thai goods.

For the whole year, the economy expanded by 4.1 per cent in 2018, improving from 3.9 per cent in 2017. The GDP growth was driven mainly by strong merchandise exports and tourism sector, thanks to the economic pickup of Thailand’s key trading partners. In 2018, export value (in USD terms) grew by 6.3 per cent and import value increased with 11.7 per cent. 

The Thai economy in 2019 is expected to grow slower than 2018, in the range of 3.5 per cent, supported by:

  • the rising global economy which will sustain the robust growth of Thai exports and subsequently stimulates the manufacturing production;
  • increasing government expenditure and accelerating public investment as infrastructure projects being more materialized;
  • pronounced recovery of private investment led by public infrastructure projects, the expansion of export sector, and improvement in business sentiment;
  • improved employment situation and household income following the expected increase in both farm and manufacturing production, and continued expansion of key service sectors.

For medium- to longer-term, Thailand continues to face challenges on declining productivity, ageing population, inequality in various dimensions, and some outdated regulations as well as corruption and an insecure political situation.

The Netherlands-Thailand trade and investment

Bilateral trade

According to CBS data, the Netherland’s total merchandise trade with Thailand surged 10 per cent in 2018 (to EUR 4.4 billion from EUR 4.0 billion in 2017), driven mainly by the growth of the Netherland’s import from Thailand which expanded by 13.5 per cent (to EUR 3.2 billion from EUR 2.8 billion in 2017). Major contributions are increases in the imports of electrical and electronic products, computers, integrated chips, motorcycles, prepared poultry and rubber products.

The Netherlands’ imports from Thailand grew by 13.5 per cent (to EUR 3.2 billion from EUR 2.8 billion in 2017).

Export to Thailand remained steady.

Bilateral investment

The Netherlands is the biggest EU investor in Thailand (and the 4th largest overall after Japan, Singapore and the US). The Bank of Thailand statistics show the accumulated FDI from the Netherlands to Thailand increased to USD15 billion as at the end of the third quarter of 2017, from USD14.3 billion of the same period of 2017, or accounted for 6.5 per cent of total FDI in Thailand.

The Netherlands is also no. 1 EU destination for Thai direct investment overseas (the 8th ). Thai direct investment in the Netherlands at the end of the third quarter of 2018 stood at USD9.3 billion.

Business Support Services by the Embassy

The Embassy continues to proactively provide business support services including market intelligence and business opportunities e.g. factsheets, market studies and other publications to Dutch business interested in doing business in Thailand.

General trade enquiries such as export and import questions, setting up company in Thailand, or sector knowledge remain the most popular request. Last year, the team provided support to 646 trade requests en 78 visits. By sector, agricultural & food received the most requests.