Thailand Economic Monitor, August 2017 : Digital Transformation
The Thai economic recovery has continued to broaden and gain momentum, reflecting an increase in external demand amid global growth and a recovery from severe drought. The economy grew by 3.3 percent in 2017Q1, exceeding market expectations, as far...
| Main Authors: | , , , , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Bangkok
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/437841530850260057/Thailand-economic-monitor-digital-transformation http://hdl.handle.net/10986/30248 |
| Summary: | The Thai economic recovery has continued
to broaden and gain momentum, reflecting an increase in
external demand amid global growth and a recovery from
severe drought. The economy grew by 3.3 percent in 2017Q1,
exceeding market expectations, as farm incomes and
merchandise and tourism exports rose and fiscal stimulus
policies continued. Merchandise exports recorded 6.6 percent
growth, the highest growth observed in the last four years,
due to both rising global commodity price and trading
partner growth. Economic indicators suggest that the goods
export upswing became increasingly broad-based and sustained
in 2017Q2. The agricultural sector expanded by 7.7 percent
due to rising agricultural prices and recovery from severe
drought in 2015-2016. Domestic demand remained lackluster.
Both private investment and private consumption growth
remained sluggish. Private investment contracted by 1.1
percent in 2017Q1, reflecting spare production capacity in
the manufacturing sector although certain subsectors showed
lowered spare capacity due to increased external demand.
Overall credit issuance remained subdued as lending
standards tightened while loans to large corporates turned
positive in 2017Q1 for the first time since 2015. Loans to
SMEs and households continued their deceleration trends.
Softening food prices resulted in a deceleration in headline
inflation. The broadening export upturn and public
infrastructure plans are contributing to an improvement in
Thailand’s economic outlook. Economic growth is projected to
reach 3.5 percent in 2017 and 3.6 percent in 2018, as
inflation is expected to return gradually to the low end of
the inflation target range (1.0-4.0 percent). Continued
agricultural recovery and strengthened household balance
sheets will support private consumption growth while the
export upswing will eventually spur manufacturing activity,
capital goods import and private investment. However, a
self-sustained recovery will hinge rising domestic demand
supported by continued expansionary fiscal and monetary
policies. Public infrastructure investments to connect
lagging regions and upgrade rail through dual tracking can
crowd in private investment, raise economy-wide productivity
and improve investor sentiment. One specific focus area
would be network slicing to ready broadband networks for the
industries of the future in key requirements: latency,
throughput, capacity and availability. Broadband
infrastructure in Thailand will face exploding demands of
data and heterogeneous requirements of different industries
e.g. automotive, healthcare, logistics, retail or utilities.
The network requirements for a factory with automated and
flexible production systems would differ from those of a
hospital doing robotic surgeries, or from the requirements
of self-driving cars. To cater to these different
requirements, networks will need to support different
requirements for latency, throughput, capacity and
availability. This would require a paradigm shift towards
network slicing which can meet such needs. The European
Commission is supporting a coalition of network operators1
and academic institutions to focus on network slicing for
5G, and has provided $8.9 million in funding for the initiative. |
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