World Bank Upgrades Thailand to Middle Income Economy

The World Bank has recently upgraded Thailand’s income categorization to an upper-middle income economy from a lower-middle income economy, putting Thailand on par with China and Malaysia.  The World Bank based their decision on the success of these countries in poverty reduction, prudent macro-economic policy, the strong fiscal status and relatively low inflation and public debt. Currently, Thailand’s gross national income per capita is $4,210.  The World Bank’s upper-middle income economy range is $3,976-$12,275.

Thailand, Southeast Asia’s second largest economy, has reported 7.8% growth in 2010.  From April-June, the Thai economy posted 2.6% growth during April to June period this year. The Office of the National Economic and Social Development Board (NESDB) expects the Thailand’s GDP growth to reach 3.5% to 4% in 2011.

Latest Economic Outlook

Thailand’s economic condition in July remains sound supported by the robust exports, growing number of tourists while the unemployment rate hits record low.

Exports surge 36.4% on year to $21.1 billion in July, while the number of tourist increases 21.5% to 1.55 million from the previous year. The unemployment rate lowers to 0.4% while public debt had been trimmed to 40.7% of the country’s gross domestic product.

August’s core inflation rate, excluding food and energy prices, rose 2.85%.  This is still within the Bank of Thailand’s target range of 0.5%-3.0%.  However, headline inflation has risen 4.29% on year. As of September 2, Thailand’s foreign reserves stood at $186.9 billion.

The Bank of Thailand’s policy rate stood at 3.50% after the central bank has raised its benchmark rates by 225 basis points since July 2010.

Piyarat Setthasiriphaiboon

13 September 2011