15 August 2009, 6:39 am
Impact of Global Economic Downturn on Thailand Globalization integrated global economy marked particularly by free trade, free flow of capital, and cheaper foreign labor market. It is hard to deny troubles in Wall Street do affect Bangkok Street. From the author assumption, the following are the impact of global economic downturn on Thailand. 1.)Falling foreign investment and stock markets: the global economic downturn has caused the service sectors to minimize a wide range of investment and trade activities, especially manufacturing sectors and tourism industries. Sharply drop of global demand resulted in enormous goods and services reduction in most countries; particularly Asia countries, because the Asian are major exporters and enormous trading volumes take place in the region. Thailand export account for 70% of GDP and now shrinking for the first time in many years. The industries face massive reductions of exports are automobiles, electronics, textiles, computer parts, and some food processing products. Tough financial time also causes tourism industries to loss large portions of its revenues and sees no concrete signs of improvement. In addition, many foreign investors are shortening their financial investments and pulling out funds from the Thai stock exchange markets to sustain their own financial conditions. Falling stock exchange markets causes the domestic investment to decline and result of financial difficulty in the country. 2.) Sky rocking unemployment rate: the majority of companies have seen a reduction in manufactured goods and services because of the financial challenges in the U.S and the global economy. The large segment of Thai GDP comes from manufacturing sectors and tourism industries. Unfortunately, the two sectors are the hot spot for the mad financial storm. Global economic downturn certainly causes manufacturing sectors and tourism industries to loss large portions of its revenues. Consequently, unemployment rates reach higher and become major issues, especially in manufacturing and tourism industries. Numerous unemployed workers are searching for jobs and the Thai workforce is no exception. “The unemployment rate adjust higher and employment growth fell as a consequence of a reduction in production” 3.) Diminishing household consumption and purchasing power: the global financial crisis definitely has reached Thai neighborhood. At the end of fiscal year 2008, Majority of the Thai economic performed poorly owing to decreasing of export, raising unemployment rate, downsizing businesses, and declining GDP. In the beginning of 2009, Thai economy still faced massive effects of the bad financial storm that continually caused insensitive drop in global demand, investment, and export. Reductions of working hours and employment have shrinking buying power caused household and private consumption to fall sharply.... Read More »
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