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Oecd amro s2 01_thailand dr porametee vimolsiri

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2nd OECD-AMRO Asian Regional Roundtable

2nd OECD-AMRO Asian Regional Roundtable

Published in: Business, Economy & Finance

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  • 1. 1 “Thailand: Escaping the Middle-income Trap” Porametee Vimolsiri Deputy Secretary-General Office of the National Economic and Social Development Board (NESDB) The 2nd OECD-AMRO Joint Asian Regional Roundtable 20 July 2013, Singapore
  • 2. 2 0 20 40 60 Thailand Singapore Malaysia Indonesia Economic Performance Business Efficiency Government EfficiencyInfrastructure Source: IMD IMD Ranking 2012 Thailand’s Global Economic Ranking 51st Largest Area 13th Largest Tourist Receipts 19th Largest Agricultural Output 20th Largest Manufacturing Output 1st Largest Hard Disk Drive Producer 1st ASEAN Largest Automobile Producer 1st ASEAN Largest Electronic Appliance Producer 23rd Largest Economies by Purchasing Power 34th Largest Economies 37th Largest Services Output Thailand Economic Strength GDP Growth (%) Avg. 1961-2010 World 3.49 China 8.24 Indonesia 5.40 Korea 7.21 Malaysia 6.45 Philippines 4.09 Singapore 7.89 Thailand 6.38 Source: WTO Thailand export share continued to increase. In 2008, Thailand is the 24th export rank in world. 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 %Share Indonesia Malaysia Thailand Viet Nam
  • 3. 3 Source: NESDB Thailand’s GDP growth -7 -5.2 -2.8 5.9 12 9.2 6.6 3.8 3.2 2.7 3.7 -8.9 0.4 4.4 3.1 18.9 -2.5 1.9 3 4.1 2.2 -0.8 1.1 1.9 0.5 -1 2.4 -10.5 10.3 3.1 1.5 3.6 -15 -10 -5 0 5 10 15 20 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 %yoy %qoq(SA) 2010 Q2 Political unrest 2011 Q2 Impact of Tsunami in Japan 2010 Q3 Slowdown of Trading partners’ economies 2010 Q4 Flood in Thailand 2012 Q2- Q3 Trading partners’ Economic Slowdown 2011 Q3/Q4 Severe flood = -2.3 = 7.8 = 0.1 = 6.4 2012 Q4 Global Economic Recovery
  • 4. 4 Agriculture 9% Mining 2% Manufacturin g 39% Electricity, Gas and Water Supply 4% Construction 2% Trade 13% Hotels and Restaurants 4% Transportation 10% Other 17% Diversification is among the Strength of Thai Economy US 10% EU 9% Japan 10% ASEAN5 16% CLMV 8% China 12% Other 35% Source: NESDB GDP Structure Export Share by Destinations Source: NESDB Source: MOC Source: NESDB Real GDP Growth: Expenditure Side Growth (% YOY) 2011 2012 Year Year Q1 Q2 Q3 Q4 Consumption 1.3 6.7 2.4 5.6 6.7 12.2 - Private 1.3 8.8 2.9 5.3 6.0 12.2 - Public 1.1 1.1 -0.2 7.4 9.8 12.1 Investment 3.3 13.3 5.2 10.2 15.5 23.5 - Private -8.7 8.9 -9.6 4.0 13.2 31.1 - Public 7.2 14.6 9.2 11.8 16.2 21.7 Export 9.5 2.9 -3.2 1.1 -2.8 19.0 Import 13.7 6.2 4.3 8.6 -1.8 14.7 GDP 0.1 6.4 0.4 4.4 3.1 18.9 Real GDP Growth: Production Side Growth (% YOY) 2011 2012 Year Year Q1 Q2 Q3 Q4 Agricultural 4.1 3.1 3.4 1.8 8.3 0.8 Manufacturing -4.3 7.0 -4.3 2.8 -1.1 37.4 Construction -5.1 7.8 0.8 6.9 9.8 14.1 Trade 1.8 5.2 4.1 5.4 4.0 7.6 Hotel & Restaurant 7.4 11.5 5.6 8.6 7.0 25.4 Financial 13.3 6.6 6.4 5.5 4.8 9.9 GDP 0.1 6.4 0.4 4.4 3.1 18.9
  • 5. 5 Economic Stability Internal Stability External stability 181.6 3.1 -3 -1 1 3 5 7 9 11 0 40 80 120 160 200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 TimesInternational Reserves (bn USD) International Reserves/ST External Debts 3.1 -4.0 1.0 6.0 11.0 16.0 -4,000 0 4,000 8,000 12,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 = 21,895.8 2010 = 10,023.6 2011 = 5,888.6 2012 = 2,728.0 CA Balance (Mil USD) CA/GDP (%) 3.2 1.8 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011 2012 Headline CPI Core CPI Headline CPI 2009=-0.9 190.0 0.5 0.0 0.5 1.0 1.5 2.0 2.5 0 200 400 600 800 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Unemployed persons (Th persons) Unemployment Rate Source: Bank of Thailand, Ministry of Commerce, National Statistical Office Headline CPI 2008=5.5 Core CPI 2008=2.3 Headline CPI 2010=3.3 Headline CPI 2011=3.8 Headline CPI 2012=3.0 Core CPI 2009=0.3 Core CPI 2011=2.4 Core CPI 2010=0.9 Core CPI 2012=2.1
  • 6. 6 Stage of Development & Current Thailand Position Low Income High IncomeMiddle Income Stage I Monoculture, subsi stence agriculture, aid dependency Stage II Simple manufacturing under foreign guidance Stage III Have supporting industries, but remains Under foreign guidance Stage IV Management technology mastered, can produce high quality goods Stage V Full capability in innovation and product design as global leader Glass ceiling for ASEAN countries (Middle income trap) Vietnam Malaysia Thailand Korea Taiwan Japan, US, Germany France Italy Arrival of manufacturing FDI Agglomeration Technology absorption Creativity Pre- industrialization Initial FDI absorption Internalizing parts & components Internalizing skills & technology Internalizing innovation Source: NESDB
  • 7. 7 Medium-term Development Challenge 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 USD Lower Middle Income Country High Income Country Upper Middle Income Country Projection Current (per cap) GNI = $4420 GDP = $5382 Source: NESDB, World Bank Thai GNI per Capita Target : 1. Maintain GDP growth at 5-6 % 2. Achieve GNI per capita of 12,000 USD (Atlas method) by 2030 TFP and TFP Growth Annual Change in TFP, 1985-2007 TFP2007,US=100
  • 8. 8 Medium-term growth strategy will emphasize investment to improve productivity/quality, competitiveness, and long-term potential growth -2 0 2 4 6 8 10 12 14 2 4 6 8 10 12 AverageInvestmentGrowth2000-2011 Average GDP Growth 2000 - 2011 China India Indonesia Singapore Malaysia Philippines Thailand Korea Taiwan Source: IMF Justifications for investment stimulation • Strengthen domestic demand to reduce the impacts from global slowdown • Increase long-run growth potential • Reduce logistic costs • Support economic restructuring  Agricultural TFP  Efficiency in manufacturing production  High mobility service sector  Regional connectivity • With the rapid expansion of private investment, the bottleneck is likely • Countries with lower GDP per-capita normally have higher rate of capital accumulation
  • 9. Subscribe: Jul 5, 2004 Effective: Jan 1, 2005 Japan Thailand Under the Negotiation Under the Negotiation Leveraging Regional Integration Subscribe: April 19, 2005 Effective: Jul 1, 2005 Subscribe: Oct 9, 2003 Effective: Sep 1, 2004 Subscribe: June, 2006 Effective: Nov 1, 2007 Subscribe: Nov 19, 2005 Effective: Dec 31, 2011 Korea China ASEAN AEC2015 Subscribe: Feb 27, 2009 Effective: Jan 1, 2010 Subscribe: Aug 13, 2009 Effective: Jan 1,2010 Subscribe: Apr 11, 2008 Effective: Jun 1, 2009 Subscribe: Nov 29, 2004 Effective: Jan 1, 2006 Subscribe: Feb 27, 2009 Effective: Mar 12, 2010 EU India Peru Chile New Zealand Effective: Dec 29, 2002 Effective: Oct 1, 2003 Bahrain Australia Source: Ministry of Commerce
  • 10. Human Capital / Quality of Life / Knowledge / Fairness Infrastructure / Productivity/ Research & Development 1. Growth and Competitiveness Towards greater per capita income Towards Inequality Reduction Towards environmen tal friendly Towards Balanced and improved Public Sector Management Legal Framework 2.Inclusive Growth 3. Green Growth Thailand’s Country Strategy 4. Internal Process
  • 11. 11 1. Growth & Competitiveness 2. Inclusive Growth 3. Green Growth Restructuring Production and Service Sectors Agriculture Reducing Social Inequality - Developing Quality of Life/Improving Healthcare - Developing Welfare System Creating Opportunities & Income for SMEs & Community Economies - Education Reform - Skill Development for Labor - Promoting Access to Justice - Creating Good Governance Building Knowledge on ASEAN 4. Internal Process Green Growth Natural Resources Management Eco- Industrial Cities Eco- friendly Fiscal Policy GHG Emission Reduction Climate Change Budget Process Reform Developmentof under-utilized Public Sector Assets Security Improvement Political Reform Legal Reform Public Sector Reform Human Capital Developme nt in Public Sector Tax Reform Industry Tourism/Service Regional Connectivity Competitiveness Development Urban/Spatial Development Infrastructure Energy R&D Country Strategy
  • 12. 12 12 3. Infrastructure and Logistics development 4. Human resources development 5. Improvement of laws, rules and regulation 6. Building awareness, und erstanding and realization of being ASEAN 7. Security 8. Increase urban potentiality as to link opportunity from ASEAN 1. Increase competitiveness of products, services , trade and investment 2.Improveme nt of quality of life and social protection Vision Thailand is strong country member who will corporately support the betterment of people in ASEAN STRATEGY TOWARDS ASEAN COMMUNITY IN 2015 • Connectivity • Rules/Regulations of transport of goods /passengers • English skill • Skilled labor/skilled businessman • Standard of labor skill • Education curriculum • Corporate connection wt ASEAN members • Obligation • Trade facilitation • Benefit protection of the nation • Awareness to every parties • ASEAN knowledge • Culture of ASEAN’s country members • International corporation • Crime/disaster • Border areas management • Good governance • Capital City • Industrial town • Border trade town • Productivity • Standard of services product • Market • Labor Protection • Social welfare • Working environment
  • 13. 13 Country Strategy Human Capital / Quality of Life / Knowledge / Fairness Infrastructure / Productivity/ Research & Development 1. Growth and Competitiveness Towards High Income Country Towards Economic Equity Towards Sustainabl e Economy Towards Good Governanc e in Public Sector Legal Framework 2.Inclusive Growth 3. Green Growth Water Resource Management ~10,300 Mil. USD Infrastructure Development ~70,000 Mil. USD High-speed Train Railway Improvement Road Network Major Investment Plans Major Investment Plans
  • 14. 14 High Speed Train Metropolitan Rail System Dual Track Rail system Key Infrastructure Project Development Network in 2029: The total length is 495 km., with 308 stations, covering the area of 680 sq.km. with 5.13 mill. population (EIRR = 19.67%) Total length : 1,915 km Total investment: 15,300 Mill.USD No of route: 4 routes - North (Bang Sue-Chiang Mai) - North-East (Bang Sue-Nong Kai) - East (Makkasan-Rayong) - South (Bang Se-Huahin) Total length : 768 km Total investment: 2,590 Mill.USD No of route: 5 routes - Chachoensao-Kaeng Khoi - Lop Buri-Nakhonsawan-Makabao-Thanon Chira Junction - Thanon Chira Junction-Khonkaen - Nahkonpathom-Hauhin - Prachuap Khiri Khan-Chumphon Mode Budget (bn USD) Share of Total Budget Rail Transport 49.76 77% Road Transport 12.94 20% Water Transport 0.46 0.7% Air Transport 0.89 1.4% Border Facilities 0.41 0.6% Total 64.46 100%
  • 15. 15 Thank You www.nesdb.go.th NESDB’s Vision : “Being the core planning agency responsible for strategy formulation towards balanced and sustainable development, upholding national interests, up-to-date with the latest changes and working with the highest efficiency”