Economic growth for the full year 2017 is now projected around 3.5 %, says a new report. (See here.)
According to the August 2017 edition of the Thailand Economic Monitor, 7.7% growth in the agricultural sector boosted incomes, and complemented the continued fiscal stimulus and an upturn in merchandise exports, which recorded its highest growth rate – 6.6% – in the last four years.
Although uncertainty in the global economy such as increased trade protectionism poses some risks to the growth momentum, Thailand’s economy is expected to expand further in 2018, to around 3.6%.
Even faster growth may be possible in the long-term, if policy reforms continue in education, services liberalisation, and public infrastructure management, and the National Masterplan for the Digital Economy is fully carried out.
“The government of Thailand recognises the significance of the digital economy and has launched various projects including high-speed internet access for all villages to setting up a government big data analytics center,” said Pichet Durongkaveroj, Minister of Digital Economy and Society.
“These projects aim to enhance connectivity, create new opportunities for people in communities, and harness data for better decision-making. These are examples of the Thai government’s vision to lay a solid foundation toward Thailand 4.0 through digital transformation encompassing Security, Infrastructure, Government, Manpower and, last but not least, Applications (SIGMA).”
The rise of the digital economy is continuing to transform Thailand. Mobile services are affordable and widely used. At the same time, technical digital skills can improve, as can the regulatory environment. In 2016, Thailand ranked 82 out of 175 countries in the Telecommunications Development Sector (ITU-D) Information Communication Technology (ICT) Development Index, which measures access to, usage of, and skills related to ICT, and ranked 77 out of 193 countries in the United Nations E-Government Survey, which follows progress in the use of e-government to improve the delivery of public services.
“Thailand is known for its creativity, innovation and high-level services, and is taking important steps to help advance the digital economy and boost the country’s economic potential,” said Ulrich Zachau, World Bank Director for Thailand, Malaysia and Regional Partnerships.
“The pace of digital transformation will pick up speed if access to quality education also expands and provides more Thais the opportunity to join and benefit from the digital economy, meeting business needs and increasing family incomes.”
The report recommends that Thailand consider developing data centric digital strategies, with a focus on the growing importance of data as economic assets. It also recommends increased flexibility and agility in allocating bandwidth for diverse uses, and new technologies such as blockchain.
Thailand may also consider how institutions can track technological change better and become more responsive to digital opportunities and threats.
The Thailand Economic Monitor, published twice a year, is the World Bank Thailand office’s flagship report, analysing the country’s economic performance and outlook.
The “Thailand Economic Monitor– August 2017: Digital Transformation” report identifies the following key points:
Thailand’s economy gains momentum and is projected to attain 3.5% in 2017, and 3.6% in 2018.
- The economy grew by 3.3% during the first quarter of 2017, exceeding market expectations. It is also gaining momentum as farm incomes recover from drought, merchandise and tourism exports rise, and the continued fiscal stimulus.
- Merchandise export grew 6.6%, the highest in the last four years, due to rising global commodity price and trading partner growth.
- The agricultural sector expanded by 7.7% due to rising agricultural prices and recovery from severe drought.
- Private consumption expanded by 3.1%, compared to 2.2% in 2015, driven by improved farm income, stimulus measures and recovering consumer confidence.
- More public infrastructure investments to connect lagging regions and upgrade rail through dual tracking can boost private investment, raise economy-wide productivity and improve investor sentiment.
- Thailand has the potential to raise growth to above 4% by addressing structural bottlenecks – education quality, services liberalization and public infrastructure management.
- Risks to recovery: Political uncertainty if reforms and elections become postponed, and a deterioration in the global environment including increased trade protectionism and a slowdown in the Chinese economy may impede Thailand’s export momentum and private investment recovery.
The digital economy has high potential for socio-economic impact and Thailand can build on its digital strategy to secure new opportunities for the country.
- In as little over two decades since 1994, the global digital economy is now worth $11.5 trillion, equivalent to 15.5% of global GDP.
- In 2016, Thailand created the Ministry of Digital Economy and Society, putting in place a 20-year National Digital Economy Masterplan, divided into four phases:
- Laying the digital foundation
- Achieving digital inclusion
- Moving to full transformation, and
- Achieving global digital leadership
- Since then, Thailand has launched initiatives like Digital Thailand, Thailand 4.0, and a special program for developing the Eastern Economic Corridor (digital park, University 4.0).
- Thailand’s performance on various digital economy related indices and rankings has been mixed. It ranked:
- 82 out of 175 on ITU’s ICT Development Index 2016
- 62 among 139 countries on the World Economic Forum’s Networked Readiness Index 2016
- 77 out of 193 countries on the United Nations e-Government Survey 2016
- 21 out of 65 countries on Waseda University’s 2017 Digital Government Rankings
- The National Digital Economy Masterplan is on the right track with several worthwhile initiatives:
- Development of hard infrastructure
- Acceleration of the digital economy
- Promoting digital society, digital government, workforce development and soft infrastructure (legal, regulatory, security)
- Thailand can reach its aspired digital frontier by focusing on developing these key areas:
- - Digital foundations (data sharing, future-ready networks)
- - Transformative business models (blockchain)
- - Digital skills
- - Cross-cutting institutions related to strategic foresight and agile policymaking
For the full report, click here.