Thailand’s GDP is projected to improve from 2.6 percent in 2022 to between 2.7 and 3.6 percent in 2023. Recovering private consumption and the tourism sector will both contribute to economic growth.Due to the pandemic, the second-largest economy in Southeast Asia had a severe recession in 2020. Thailand’s GDP shrank by 6.1 percent that year, the country’s biggest decline since the Asian Financial Crisis.
Thailand continues to experience a number of difficulties this year, including a weaker baht, a decline in exports due to external concerns, and a projected decline in consumer spending, but the nation still presents many chances for foreign investors. Thailand serves as a significant manufacturing and distribution hub with access to the Chinese and Asian markets thanks to its strategic location in the middle of ASEAN.
We examine a number of sectors with promising growth potential in 2023.
the tourism industry is growing
An significant industry in Thailand is tourism. Before the commencement of COVID-19, the industry brought in a record-breaking 39 million foreign visitors, contributing around 20 percent of the nation’s GDP. The economy gained US$64 billion as a result. Thailand is especially eager to reclaim the Chinese tourist industry now that China’s borders have been opened since early January. This year, the government is aiming to attract five million Chinese visitors, who are predicted to boost the economy by at least US$13 billion. Thailand welcomed 9.47 million foreign visitors between January and May 2023 and hopes to beat the 11.5 million visitors that came over the entire year of 2022 after that number dropped to just 427,869 in 2021. In 2023, Thailand anticipates receiving 25 million foreign visitors and aims to earn US$71 billion in revenue.
With 40 million foreign visitors expected to visit Thailand in 2024, the country’s tourism industry is expected to reach pre-pandemic levels by 2025.
Exports are increasing.
Meals exported
This year, Thailand’s food exports are expected to climb by 44.3 billion dollars, a 2.1 percent increase over last year, driven by rising demand from nations recovering from the pandemic, particularly China.
One of the top 10 producers of several significant agricultural goods, including rice, pineapples, cassava, sugar cane, natural rubber, and coconuts, Thailand is one of the world’s greatest net exporters of food. The country hopes to reach US$58.6 billion in food exports by 2036, which currently account for about 23% of its yearly GDP.
Thailand’s investment opportunities
Thailand offers many investment prospects for foreign companies as Southeast Asia’s second-largest economy after Indonesia. The nation’s domestic consumption has increased throughout the years along with strong export-oriented industry, and as a result, it was classified as an upper-middle-income country in 2011.
Added-value manufacturing
Thailand’s economy is heavily reliant on exports, which made up almost 60% of GDP prior to the pandemic. As a result, the manufacturing sector of the economy, which will account for 27% of GDP in 2021, is crucial; the success or failure of this sector frequently determines the state of the economy as a whole.
Thailand’s manufacturing sector has grown significantly over the past 50 years. It is now eager to draw investments for mid- to high-tech manufacturing, especially as rivals in the area like Vietnam and Cambodia emerge as new hubs for affordable production.
EV production
The Thai government wants Thailand to become a hub for the production of electric vehicles (EVs). Mercedes, a German luxury automaker, selected Thailand as the first location in Southeast Asia for the production of its electric EQS model. Toyota and the Chinese automaker Great Wall Motor also signed up for the government’s incentive program to produce EVs in Thailand.
Generous incentives like 3–11 years of tax exemptions and investment incentives for EV infrastructure have accelerated the nation’s rise as a regional centre for EV production.
Medical travel
In 2019, Thailand received US$1.8 billion from more than four million medical tourists, accounting for 3% of the country’s GDP. Prior to the epidemic, this figure was expected to reach 3.5%. The majority of the nation’s customers were from the US, the Middle East, and Europe.
When compared to the West, medical procedures can be up to 30% less expensive, yet the standard of healthcare is on par with that of the best facilities globally. By 2027, it is anticipated that the Thai medical tourism business will be worth $24.4 billion.
Halal food production
Thailand is the fifth largest producer of Halal foods and the 12th largest exporter of Halal goods worldwide despite having a minority of Muslims. 20 percent of Thailand’s overall food exports are halal, and 60 percent of those exports go to Indonesia, Malaysia, and Brunei, which are Muslim-majority nations. As a result, the nation is well situated to serve as a regional centre for Halal F&B manufacturing.
By improving its research and development capabilities and expanding its capacity for Halal certification and formulation, Thailand has achieved several important goals in the Halal food sector.
There are plans for new free trade agreements.
Thailand has signed 14 free trade agreements (FTAs), with the most recent being the Regional Comprehensive Economic Partnership (RCEP), which is the largest FTA in the world.
When importing parts, raw materials, and other industrial inputs from these nations, these FTAs give investors a competitive advantage.
By the middle of 2024, Thailand hopes to complete FTAs with the European Union (EU), Sri Lanka, and the United Arab Emirates (UAE), as the nation seeks to increase export market access and draw in foreign capital.
The first of its kind with a Middle Eastern nation would be an FTA with the UAE. The UAE is currently the largest trading partner in the Middle East and Thailand’s sixth-largest trading partner overall. Furthermore, Thailand will gain access to the South Asian market and establish ties with India, Pakistan, Bangladesh, and Nepal by signing an FTA with Sri Lanka.
