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The Thai economy continued to perform well in 2004, though growth was lower than last yearˇ¦s. Higher oil prices have reduced growth but not as much as the actual rise in world prices would suggest as the domestic retail price of diesel has not been raised this year.

Growth of private consumption is down relative to last year due in part to higher retail prices of gasoline for cars, and in part to slower growth in rural incomes. Growth of private investment has slowed too relative to last year, especially foreign direct investment. Public investment, however, has risen significantly this year, in sharp contrast to the previous five years of continuous retrenchment in public capital formation. Receipts from tourism were up strongly after the slump last year due to Severe Acute Respiratory Syndrome (SARS). Export earnings were growing strongly, though growth in export volumes is down compared to 2003, and the terms of trade will improve by roughly 3.5 percent notwithstanding higher world oil prices.

Exports earnings grew in 2004. This growth was made possible by a 17 percent increase in world prices of exports, since export volumes grew by only 7 percent in 2003. Three export categories ˇV electrical machinery and parts, non-electrical machinery and parts, vehicles and parts ˇV comprised 44 percent of export earnings this year. In terms of contribution to export growth, the developed country markets (US, Europe & Japan) provided most to the growth in export-earnings, followed by ASEAN; together they accounted for two-thirds of this growth, with China contributing a tenth, significantly lower than last year. Exports to ASEAN grew by 30 percent, twice the rate of last year, while exports to China grew by 26 percent, two fifths of last-yearˇ¦s rate.

However, export volumes grew slowly compared to 2003. Clearly negative growth in volumes of agricultural and fishery exports contributed, but most of it is accounted for by a slowdown in volume-growth of manufactured exports. Within manufactures, volume growths of resource-based products and high technology products have fallen relative to last year. With rising capacity-utilization, supply-side constraints are becoming major influences on Thailandˇ¦s export performance. Future private investment in manufacturing will be a key determinant of Thailandˇ¦s ability to sustain high export growth.

This performance should be viewed against the remarkable Thai export performance since 1999. Exports have grown rapidly in every year except 2001, thereby raising the export share in Thailandˇ¦s GDP significantly (relative to pre-crisis years) and Thailandˇ¦s export share in world market. This success has been accompanied by a significant shift in the composition of exports towards higher value-added items like electrical/non-electrical machinery and parts as well as vehicle and parts. This has been driven in part by higher foreign direct investment inflows in the post-crisis period, encouraged no doubt by the liberalization of foreign entry soon after the crisis, and by the further rationalization of the import regime.

Source: World Bank

Export Value
96.1 2004
78.1 2003
66.1 2002
63.2 2001
67.9 2000
56.8 1999
Billion US$ Year
Export Growth
23.9 2004
18.2 2003
4.8 2002
-6.9 2001
19.6 2000
7.4 1999
% (in US$) Year

Source: Bank of Thailand (BOT)
Export value increased dramatically in 2004 to 96.1 billion US dollars. Export growth increased to nearly 24% from 18% in 2003

Import Value
94.4 2004
74.3 2003
63.4 2002
60.7 2001
62.4 2000
47.5 1999
Billion US$ Year
Import Growth
27.0 2004*
17.4 2003
4.6 2002
-2.8 2001
31.3 2000
16.9 1999
% (in US$) Year

Source: BOT

Thailand's current account has showed a surplus since 1998. The surplus stood at US$8.0 billion in 2003 and at US$7.3 billion in 2004.

Since the economic crisis of 1997, Thailand's balance of payments have generally stayed in surplus. Although the balance slipped back to a deficit of US$1.6 billion by year end 2000, a small surplus returned in 2001, and the surplus grew throughout 2002. The figure for 2003 was US$ 5.7 billion in 2004.

Current Account
7.3 2004
8.0 2003
7.6 2002
6.2 2001
9.3 2000
12.5 1999
Billion US$ Year
Balance of Payments
5.7 2004
0.1 2003
4.2 2002
1.3 2001
-1.6 2000
4.6 1999
Billion US$ Year
Source: BOT

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