Commercial Magazine


By Arnie Aurellano

Thailand, which has traditionally had one of Southeast Asia’s strongest and most consistent economies, has had a rough road to travel of late.

Widely perceived as a success story after transitioning, per the World Bank, into an upper-income country in the early 2010s, Thailand has been on a path to recovery in the past few years. After its economy averaged a steady 7 percent annual growth rate from the 1960s through the mid-1990s, Thailand fell victim to the Asian financial crisis of 1999 to 2005. A military coup in 2014 led to even slower gains, with the country posting lean economic growth of just 2.3 percent in the next two years.

The economic impacts of that coup are being felt even today. An election held this past March — the first since the coup took place — still hadn’t yielded results as of mid-April, with the voting widely perceived as skewed toward the ruling military junta. Despite international concerns, initial reports of the incumbents retaining power were healthy for the economy, with Thailand’s currency posting Southeast Asia’s healthiest short-term gains.

Ensuing allegations from rival parties, however, have observers warning of a period of uncertainty, with protests and even violence potentially dealing a blow to a post-election rebound. The rest of Thailand’s economic landscape is littered with similar ambiguity; tourism, for example, faces challenges after a deadly 2018 boat accident left a bad impression on the Chinese. The industry, historically one of the strongest drivers of the Thai economy, was projected to lose 670,000 tourists from China in the six-month period ending this past December, due to the tragedy.

Add to that a worsening drought and blowback from the U.S.-China trade war, and Thailand has an economic formula fraught with decidedly bitter ingredients in the short term. As a result, London’s Capital Economics is projecting scant gross domestic product growth of 3 percent this year, down from 4.1 percent in 2018.

Observers within the real estate industry also are noting a series of policy shifts, including tighter mortgage regulations and a new property tax. CBRE notes that the end result will be a year of change, with new inventory coming in waves. The race for real estate remains contested, CBRE reported, given increasing land prices and competition at the high end of the condominium market. With so much up in the air, however, many developers are taking a step back to read the landscape before making big moves.

Such uncertainty, though, provides opportunity for enterprising investors. Despite the recent turmoil, Thailand’s economic foundation remains sound, with the country boasting low inflation and unemployment as well as a proactive national bank, according to the CIA World Factbook. CBRE has graded this year as a buyer’s market in the residential-investment space, an opportunity for long-term investors to cash in down the line. Pending investments in high-speed rail along Thailand’s eastern seaboard also could help woo foreign interest in the developing area.


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