Thailand Economy Upgraded by World Bank
The income categorisation of Thailand has been upgraded from lower-middle income economy to upper-middle income economy by the World Bank this year. The classification revisions of the world’s economies are an annual event performed by The World Bank. They use the Atlas method and base their calculations on the gross national income (GNI) per capita estimates.
As of 1 July 2011, average incomes of US$3,976 to US$12,275 are now classed as upper-middle income economies. The current GNI per capita for Thailand was calculated at US$4,201 using the Atlas method. Kinda, a senior economist at The World Bank said that the last decade had seen an increase of almost 100% in the GNI per capita as well as a significant reduction of those living in poverty. The Thai economy is one of the strongest in the Asian region, Bhaopichitr said, as it has low inflation and little public debts And he believes the upgrade reflects the economic achievements by the Thai government.
Thailand has had great success in attracting foreign investment and this can be partly accredited to the friendly business environment it generates. The government has been quick to realise that diversification in manufacturing production and expansion in the emerging export markets is the way forward regarding the economy.
The fact that Thailand was able to handle the recent financial crisis with little or no damage to the economy placed it in a strong position to forge stronger ties not only with ASEAN but also the rest of the world, says Mr Bhaopichitr, adding that raising production was necessary if it was to avoid the middle-income economy trap and continue to grow. This is not only required in production but also in the services and agriculture sectors.
Although it has a very good education programme in place, it is very important that the country introduces higher levels and increases creativity, innovation and competition. This is the answer to promoting higher growth both internally and abroad. Achievement in all of these points will go a long way in helping to reduce the inequality in Thailand’s high income.
On 23 August, the new Prime Minister of Thailand, Yingluck Shinawatra, stated in her first address to parliament that the intention of her government in the coming 12 months was economic stability. They would be focusing on making the Thai domestic economy stronger. Since 2006, the economy has grown moderately and this needs to be addressed.
She also stated in her address that the aim of the government was to balance the economic structure in such a way that the wealth is distributed more evenly among the 68 million Thai people. The minimum wage will be increased in the first year and people buying their first home and/or car will receive tax exemptions on them. The minimum wage increase will be of great benefit to the poorest of the nation she said.
Yingluck Shinawatra was elected in early July as Prime Minister despite no political experience and with this address to parliament she has rapidly made her intentions clear on how she will run the country.