Economy

Economy—overview: In 1997/98 the Thai economy was in a deep recession as a result of the severe financial problems facing many Thai firms particularly banks and financial institutions. In the early 1990s Thailand liberalized financial inflows; banks and other firms borrowed in dollars and did not hedge their positions because there was no perceived exchange rate risk. These funds financed a property boom that began to taper off in the mid-1990s. In addition export growth - previously a key driver of the Thai economy—collapsed in 1996 resulting in growing doubts that the Bank of Thailand could maintain the baht's peg to the greenback. The Bank mounted an expensive defense of the exchange rate that nearly depleted foreign exchange reserves then decided to float the exchange rate triggering a sharp increase in foreign liabilities that cash-strapped Thai firms were already having trouble repaying. In August 1997 the government headed by Prime Minister Chawalit signed an agreement with the IMF for access to a $14 billion facility to supplement foreign exchange reserves and restore financial market stability. Chawalit resigned in November 1997 however under pressure for lacking a coherent approach to managing the IMF program and the financial crisis. Democratic Party leader Chuan Leekpai formed a seven-party coalition government and closely adhered to the IMF program tentatively re-establishing financial stability by February 1998. An economic turnaround requires rescheduling the large short-term foreign liabilities of Thai firms restoring high rates of export growth to finance foreign liabilities and extensively recapitalizing the banking system.

GDP: purchasing power parity—$525 billion (1997 est.)

GDP—real growth rate: -0.4% (1997 est.)

GDP—per capita: purchasing power parity—$8 800 (1997 est.)

GDP—composition by sector:

agriculture: 10%

industry: 28.7%

services: 61.3% (1997)

Inflation rate—consumer price index: 5.6% (1997 est.)

Labor force:

total: 32.6 million (1997 est.)

by occupation: agriculture 54% industry 15% services (including government) 31% (1996 est.)

Unemployment rate: 3.5%

Budget:

revenues: $24 billion

expenditures: $25 billion including capital expenditures of $8 billion (FY96/97)

Industries: tourism; textiles and garments agricultural processing beverages tobacco cement light manufacturing such as jewelry; electric appliances and components computers and parts integrated circuits furniture plastics; world's second-largest tungsten producer and third-largest tin producer

Industrial production growth rate: -15% (1997 est.)

Electricity—capacity: 15.838 million kW (1995)

Electricity—production: 77.5 billion kWh (1995)

Electricity—consumption per capita: 1 295 kWh (1995)

Agriculture—products: rice cassava (tapioca) rubber corn sugarcane coconuts soybeans

Exports:

total value: $51.6 billion (f.o.b. 1997)

commodities: manufactures 82% agricultural products and fisheries 14% (1997)

partners: US 19.6% Japan 14.9% Singapore 11% Hong Kong 5.7% Malaysia 4.3% UK 3.7% (1997)

Imports:

total value: $73.5 billion (c.i.f. 1996)

commodities: capital goods 50% consumer goods 10.2% fuels 8.7% (1997)

partners: Japan 25.6% US 13.9% Singapore 5% Taiwan 4.6% Germany 4.5% Malaysia 4.1% (1997)

Debt—external: $90 billion (1997)

Economic aid:

recipient: ODA $624 million (1993)

Currency: 1 baht (B) = 100 satang

Exchange rates: baht (B) per US$1—38.568 (January 2000) 53.812 (January 1998) 31.364 (1997) 25.343 (1996) 24.915 (1995) 25.150 (1994) 25.319 (1993)

Fiscal year: 1 October—30 September