The Importance Of Economic Development In Thailand

Thailand is a developing country who was formerly known as Siam, or better known as the land of freedom – as she is the only country in Southeast Asia who has yet to be colonized by a European power. Her influence in the region and the world falls right in the middle. She ranks the third in the quality of life among the ten ASEAN Countries and has a “high” rating in the country’s HDI, Human Development Index. She also ranks second in the six largest economy in ASEAN with a GDP nominal 2015 estimate (in billions of US dollars) of $397,475; higher than that of Singapore!

Yet despite it all, Thailand, being a country with a rich history and the second largest economy in Southeast Asia, is experiencing a bad economy such as slow economy growth,

So what determines the performance of an economy, or in other words, what does GDP measures? GDP measures either the total income of everyone in the economy or the total expenditure on the economy’s output of goods and services. The total income of everyone in the economy equals to the total expenditure on the economy’s output of goods and services. For an economy as a whole, income must equal expenditure. Every transaction has 2 parties, a buyer and a seller. Every amount of money spent by some buyers is an income for some sellers. Thus vice versa, if there is a decrease in GDP/negative GDP growth rate, the economy is declining in performance, or in other words, facing a recession. Expenditure is the spending on final goods and services produced. It consists of spending for consumption, investment, government purchases and net exports. Income is what everyone earned from that production. It consists of compensation, rental income, net interest, profits, indirect business taxes and

So when core inflation rises, it reflects that the Thai baht is having a weak purchasing power, a weak economy and that the people are spending cautiously.

Other than core inflation, Thailand also experiences headline inflations too, due to the consistent year-on-year drop of 1.8% in non-food items and beverages. Headline inflation is the measure of the total inflation within an economy, including commodities such as food and energy prices such as volatile oil and gas, which tend to be more prone to inflationary spikes. With the increase of core inflation rates and a drop in headline inflation rates in the first five months of 2015 0.77% from the year before.

From 2012 to 2013, Thailand faces the issue of having a weak export. To counteract this issue, Thailand have to increase their consumption in the economy to maintain the aggregate expenditure of the country. Thailand’s government recommended locals to go out and spend in order to increase the consumption. However, many locals and foreign investors still do not have much confidence in Thailand’s