The Thai economy displayed a strong recovery despite facing several negative factors throughout the year, including uncertainties in the global economic recovery, domestic political unrest, exchange rate volatility and occurrences of natural disaster. Strong economic fundamentals, together with accommodative fiscal and monetary policies entailed an economic expansion of 7.8 %, characterized by robust growth rates in export, tourism and domestic demand.
Global economic recovery, together with accommodative monetary and fiscal policies, has restored domestic spending, production, and investment to the normal levels. The global economic recovery and accommodative public policies had positive impacts on restoring employment growth and working hours. In addition, higher farm income, together with a revival of consumer confidence, helped restore the domestic spending to 6.1 % growth from 2.3 % contraction last year. Strong domestic spending was mirrored by a robust depository corporations’ private credits growth, which accelerated to 12.6% from a 3.1 % growth last year.
The fiscal sector remained supportive as indicated by the amount in the ordinary budget, additional finance under the Strong Thailand Project, as well as the living cost reduction measures such as subsidies in the energy and utility sectors.
Inflation rates, from a negative territory last year, turned positive as a result of the continued economic expansion and rising costs in both raw material and wages. This caused producers to gradually increase their prices.
The Thai baht appreciated in line with the regional currencies due to large capital inflows, as a result of different growth prospects between major industrialized countries, having weak economic conditions and accommodative monetary policies, while regional countries including Thailand having strong economic fundamentals. Despite exchange rate appreciation, Thailand’s export values grew robustly by 28.5 %, reflecting resiliency of the export sector.