General

In the first half of the year, Thailand’s domestic consumption has gradually recovered, its export situation has improved, the tourism industry has driven the economy upward, and more foreign investors have invested in Thailand. In addition, after the Regional Comprehensive Economic Partnership (RCEP) came into effect, China-Thailand economic and trade cooperation has become even more difficult. New opportunities have ushered in... These are all helping the Thai economy recover faster.

Good economic recovery

As Thailand's domestic consumption is gradually recovering, Thailand's economic growth may exceed 3% in the second quarter. The Bank of Thailand said that economic indicators showed that private consumption boosted the economic recovery, and Thailand's private consumption increased by 2.9% year-on-year in the first quarter. The governor of the Bank of Thailand said that private consumption is expected to grow to 9.9% year-on-year in the second quarter. Data showed that Thailand's consumer confidence index rose to 41.6 in June from 40.2 in May, the first rise in six months. In the second quarter, non-farm income (excluding government aid programs) is expected to increase to 10.3%; agricultural income (excluding government aid programs) is expected to increase to 16.7% (6.6% in the first quarter).

Thailand's Deputy Prime Minister and Minister of Commerce Zhu Lin said in Bangkok on July 27 that Thailand's total exports in the first half of the year reached 149.18 billion US dollars, an increase of 12.7% over the same period last year. Exports are an important engine of Thailand's economic growth. The main export products include computer equipment and accessories, automobiles and accessories, agricultural products, gold and jewelry. The positive growth in Thailand’s exports was driven by the continued expansion of global manufacturing and a period of depreciation of the local currency, Zhulin said, but also by cooperation between the government and the private sector.

In the first half of the year, more foreign investors went to Thailand to conduct business. On July 25, the Ministry of Commerce of Thailand announced that in the first half of the year, Thailand approved a total of 284 foreign-invested enterprises, an increase of 7.58% over the same period last year; the total investment was 69.969 billion baht, an increase of 73.48% over the same period last year. The newly approved foreign-invested enterprises in the first half of the year will bring more than 3,100 jobs to Thailand. Thailand's Ministry of Commerce said that it is expected that more foreign investors will go to Thailand to conduct business in the second half of the year. Stimulating the economy by opening up to the outside world will allow more foreign investors to invest in Thailand, which will help the Thai economy recover faster.

Tourism has been a major driver of Thailand's economic growth, with international tourists accounting for about 12% of its GDP. After the outbreak of the new crown pneumonia, Thailand's tourism industry came to a standstill. As Thailand reopens its doors, foreign tourists to Thailand have increased. From January 1 to July 6, more than 2 million international tourists entered Thailand. Thailand's Ministry of Tourism and Sports predicts that Thailand will receive 4.5 million international tourists in the fourth quarter. Thailand is expected to receive 9 million tourists this year, and revenue may reach 1.27 trillion baht.

It is understood that the Tourism Authority of Thailand has applied for a budget for cooperating with various airlines to carry out marketing activities to encourage them to open more routes. In addition, the Thai government is also actively encouraging domestic consumers to participate in domestic tourism. The "Let's Travel Together" program for domestic tourists has achieved good results, and the number of people signing up for the program is increasing. The Thai government is ready to extend the program until the end of October this year.

With the gradual recovery of the economy and more tourists entering Thailand, Thailand's economy will improve in the second half of the year. It is expected that the economy will grow by 4.1% in the third quarter and 3.8% in the fourth quarter. Thailand's Ministry of Finance expects the Thai economy to grow by between 2.5% and 3.5% in 2022.

Extensive economic and trade cooperation between China and Thailand

China is Thailand's largest trading partner and an important agricultural export market for Thailand. For a long time, China and Thailand have had close and stable relations, and have carried out extensive cooperation in the fields of economy and trade, and have formed a multi-level and multi-channel trade cooperation pattern including RCEP and the China-ASEAN Free Trade Area. According to customs data, the bilateral trade volume between China and Thailand reached US$67.9 billion in the first half of the year.

After the official entry into force of RCEP, China-Thailand fruit trade has ushered in new opportunities, and various customs clearance facilities and measures have been quickly realized. On January 6, the fruit train loaded with Thai durian arrived at Pingxiang Railway Station in Guangxi. This is the first train to import fruit from ASEAN countries after the entry into force of RCEP at Pingxiang Port in Guangxi. At the same time, the China-Laos Railway, which will open to traffic at the end of 2021, also makes it possible for Thai fruits to be exported to China through road-rail combined transportation. In early April, Thailand sent 4 containers of 40 tons of durians and 20 tons of coconuts to China via the China-Laos Railway. In the future, after the Thailand section of the railway is connected to the China-Laos railway, it is expected that the goods exported from Thailand to China will save about 60% of the transportation time and cost. Thai Agriculture Minister Charangchai said that in the first half of the year, Thailand exported 1.12 million tons of fresh fruit to China, an increase of 120,000 tons year-on-year, and the export value reached 81.282 billion baht. In particular, Thailand's durian exports to China in the first half of the year amounted to more than 500,000 tons, which is close to the total for the whole year of 2020, and is expected to hit a new record high. Cross-border transportation by rail has undoubtedly opened up a new era of Thailand's fruit export transportation.

China and Thailand are also stepping up cooperation in the field of new energy. On July 17, the first battery-powered locomotive developed by CRRC Dalian Locomotive and Rolling Stock Co., Ltd. for export to Thailand was shipped from Tianjin Port to Thailand. This is the first time that Chinese new energy locomotives have been exported to Southeast Asia. Thailand is located in the fortress of ASEAN. The pure battery-powered locomotives shipped this time can widely radiate the markets of neighboring countries and drive the market development of the entire Southeast Asia.