Thai Baht Valuation

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Jun

Thai Baht Valuation

Post by Jun »

Following a request to keep the "Thai Baht effect on Pattaya" thread on topic, here is a fork of the economic discussion:

Balance of Trade
The first image shows the Thai balance of trade. These things fluctuate from month to month, but it's CURRENTLY positive AND the average over the few years has been positive, despite the strong baht.

I think everyone understands that the UK and US both run huge balance of trade deficits. Getting to the kind of balance Thailand has would be beyond any realistic expectations for the US and UK at present.

Thai Economic Growth
As I said, this is currently running at about 1% a quarter. The only question is if this is good or not. Most of Europe would be delighted with that.
1% a quarter is above the global average, which is currently about 3.3%. So it's good compared with that.

Comparing Thailand with other ASEAN countries like Vietnam, Malaysia, Cambodia & the Phillippines is not like for like. All have a different demographic, with younger populations due to higher birth rates. See evidence in the second picture. Anyone with an interest in economics will know that countries with ageing populations on average have lower growth rates, since older people, on average, have less energy or motivation to start businesses. So Thailand should not expect to match Vietnam.
Also, the starting point is another factor in economic growth. If a country starts with low GDP per capita, which Cambodia & Vietnam have, due to the lunatic economic policies in the 1970s and 1980s, then once they correct the economic policy, huge growth rates can be achieved as low labour costs attract low end manufacturing.

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