Economic reforms: the Thai experience

Abstract

The first half of the 1980s was a period of economic reform and unsteady economic performance for the Thai economy. Since 1986 however, the economy has achieved an impressive record of economic growth characterised by surging exports, narrowing fiscal and external deficits, price stability, and an investment boom. The growth rate of real GDP recovered from a low of 3.5 per cent to 4.7 per cent in 1986, and accelerated to 10 per cent in 1989 and 1990. Particularly remarkable has been the growth in manufactured exports, which rose 19.8 per cent in 1986 and 34.2 per cent in 1987 (in real terms). Since 1987, private investment has also risen sharply, helped by increases in foreign direct investment, especially from Japan and Taiwan. Meanwhile, the public sector deficit as a share of GDP has fallen from an average of 6.1 per cent of GDP during FY1982-85 to 2.6 per cent by FY1987, and the current account deficit has narrowed from an average of 5.3 per cent during 1981-85 to a surplus of 0.6 per cent in 1986 and a deficit of 8.8 per cent in 1990.