Following a corrected surplus of $0.6 billion the month before. Thailand’s current account registered a deficit of $0.4 billion in November, the central bank reported on Thursday.
A crucial component of growth, exports fell 5.5% year over year in November, while imports increased 8.2%, creating a $0.5 billion trade surplus for the month, according to a statement from the Bank of Thailand.
The central bank announced that it would keep an eye on rising prices, the reopening of China’s border, and weakening global demand. According to BOT Assistant Governor Chayawadee Chai-Anant, the baht surged in December as a result of China’s plans to reopen, encouraging investors about a revival in Asian countries, including Thailand.
Thailand’s economy is driven by exports. The 12% increase in exports last year exceeded expectations (mostly as a result of the consequences of the Baht depreciation), but worries about the overall outlook for the global economy persist. The next two to three years’ worth of economic activity will be affected by US monetary policy decisions.
Thailand reports a current account deficit in November
Rising inflation, which grew at the quickest rate in 14 years in the second quarter of 2022, made things worse. This probably reduced household expenditure and investment.
The Thai economy depends heavily on the tourism industry, which generated 15% to 20% of the GDP. Despite the fact that tourists are returning, I don’t believe the industry will reach its pre-pandemic level of 30 million or more visits annually.
The economy’s other segments continued to struggle. The agriculture industry has long suffered the most from the dual effects of droughts and low commodity prices. Rice, sugar cane, and tapioca are examples of the crops grown as part of the annual crop rotation cycle. These products do not add value.
The average salary is rising. Unskilled laborers currently make between 330 and 350 Baht ($10) per day as the minimum wage. The minimum wage is higher than in many of the region’s developing nations. Thailand can no longer compete in some industries, like clothing manufacture.
Thousands of unskilled Thai workers are leaving the country in search of better opportunities in places like Taiwan, Korea, and Japan. Each year, remittances from these employees total $7.5 billion, or around 1.5% of the GDP. With nearly 3 million registered migrant workers in 2019, or 6% of the labor force, unskilled migrants from the neighboring countries are now filling in the gaps.
More significantly, an aging population could stifle future increases in productivity. This is evidently taking place in Thailand, where the elderly are battling to make ends meet. At the same time, they are excluded from employment prospects. Not to mention upcoming technological changes that will eliminate many of the jobs of today.