In the past few years Thailand’s economy has seen a great amount of fluctuation. Thailand’s economy is one that has always done well with growth, up until the floods of last year, decreasing production and destroying the Thai economy. So many companies had to halt production due to damaged factories and are barely beginning to piece back together their Thailand operations.
Though seemingly struggling to piece back their damaged economy, Thailand reported a GDP growth of 3.3% in the second quarter of this year, compared to the quarter just before that. It is remarkable because economists had forecasted a growth of merely 1.7%. What lead to this growth is the government spending of $63.4 billion on infrastructure projects in an attempt to prevent natural disasters such as a future flood, and overall bolster the ability for the economy to produce.
By investing in infrastructure, the Thai government is showing companies the strength of their economy and their willingness to adapt. Many companies such as Honda and Western Digital, are pouring millions of dollars into fixing damaged factories, and many predict that if another major flood were to hit Thailand, and do this kind of damage again, these companies would cease doing business in Thailand. Because of this, the Thai government is spending to insure that this will never happen again. The government is restoring producer confidence in their ability to safely manufacture in Thailand. More and more companies are coming back to Thailand, and more production is being brought to Thailand as infrastructure is improved and increased. The car industry, for example, is expected to reach an output of around 1.6 million vehicles this year. Japanese makers from Toyota are now even relying on Thailand to ship cars to Japan to meet demand. These numbers are mainly contingent on the fact that the Thai government has invested in these infrastructure repairs, making Thailand, once again, a desirable pl View More »