Bangkok (AsiaNews) – The decline of Thailand’s economy has slowed down. The Office of the National Economic and Social Development Board (NESDB) announced in February the GDP dropped by 2.3 per cent last, half of what was expected. Finance Minister Korn Jatidavanich said that the Thai economy has stabilised following the worldwide plunge in production, exports and consumption. In the first quarter of 2010, the GDP might even gain 5 per cent.
For NESDB Secretary General Umpon Kitiumpon, the recovery is already underway. The GDP expanded by 5.8 per cent in the fourth quarter of last year, reducing the overall decline for 2009.
“The economy will expand on condition that the government continues with its economic stimulus plan,” investing billions of Baht in the “transportation system and rail system in order to reduce energy and export cost.”
NESDB Deputy Secretary General Suwanee Khum-mun added, “After the recovery of the economy, the number of unemployed decreased to 1 per cent against 1.5 per cent last year. Employment went up by 1.8 per cent compared with the same time last year.”
Still, experts say that the economy is not yet on an even keel. Its current upswing is largely due to four contingent factors that might not reoccur.
First, the government is providing 500 baht (US$ 14) a month to the elderly (over 60), 600 baht to health care volunteers in remote areas and 2,000 baht (US$ 55) to people who earn less than 10,000 baht.
Secondly, it is shifting funds towards social spending, providing free education up to the age of 15, free health care for 47 million people by the end of year, and free water and electricity and other services for some months.
Third, tourism has picked up again after suffering a decline because of street protests two years ago. This is partly because tourists can now benefit from an insurance scheme worth up to US$ 10,000 in case of political turmoil. “The tourism industry has recovered rapidly,” Kitiumpon said. “The occupancy rate rose 4.6 per cent and the number of tourists increased by 4.2 million people or 26.2 per cent.”
Finally, the government is investing heavily to strengthen the economy and improve services, targeting irrigation, public transportation, education and health care.
One project (Tonkla Archeap) involves providing the unemployed with training and saplings to plant in their home villages and towns.
An additional stimulus for the Thai economy has come from the reduction or elimination of tariffs and trade barriers between six ASEAN members—Thailand, Indonesia, Malaysia, Brunei, the Philippines and Singapore—who have established AFTA, the ASEAN Free Trade Area.
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