Due to the recent trade policy imposed by Donald Trump, the president of the United States, Thailand is currently in a state of uncertainty. Thailand’s current economy is blooming because of tourism and experiences like Similan Island diving which the area is known for. The nation currently holds the title for the Southeast Asian country with the second highest economy. The main risks for Thailand, however, are geopolitics along with trade.
According to Don Nakornthab, the senior director of the Bank of Thailand, the gross domestic product of the country relies mainly on goods and services that were exported. In fact, it covers 70 per cent of the GDP.
Don said that trade politics is such a sensitive area for the economy of Thailand because it has a big chance of turning to a trade war. In the coming years, an external shock could impact the economy and place the country in hard times.
According to the trade policy devised by Trump, imported aluminium as well as steel will have tariffs. It caused a stir in the market because of the investors considered to start a confrontation. Stricter perusal from the United States could happen to Thailand because it has reached revenue of $20 billion annually from trade surplus.
Don said that Thailand is still in luck because they still have external demand to depend on while the local demand is still weak. The future of the economy is off to a good start and this year, the expansion could be better than the previous year.
In 2017, the GDP of Thailand has increased by 3.9 per cent which is higher compared to other countries in Southeast Asia. Growth rates for Philippines and Vietnam has reached more than 6 per cent for last year.
Inflation in Thai’s economy is not as evident and according to experts, the monetary authority will have a rate of 1.5 per cent, a figure which is almost to the level of the lowest recorded rate.
Tourism, on the other hand, continues to life the economy of Thailand. Tourists are flocking the capital, adventurous visitors are in Similan Island diving while others are seeking other hidden paradise in the nation.