Despite being ASEAN’s second-largest economy, Thailand has been experiencing ongoing challenges over the past few years, especially being one of the hardest-hit countries by the covid 19 pandemic.
This and other crucial factors, including the skills development of its workforce, are creating a difficult situation for the country. Still, prospects are looking positive as it tries to revive its economy, enable aggressive economic growth and establish a vibrant future.
The country’s economy is forecasted to gradually recover in 2022 due to several measures implemented by the Thai government with help from the easing of covid restrictions and allowing entry to foreign visitors without a Thailand pass from 1 July. Also, the recent economic stimulus measures worth 140 billion baht ($4.5 billion) are designed to counter the impact from the coronavirus outbreak, including cash handouts to welfare-card holders and special groups, co-payments and cash rebates. According to Finansia Research, GDP is expected to expand by 2% in 2022 and 4% in 2023. This is a positive sign for the country, which saw its economy contract by 5.3% in 2020.
What’s driving Thailand’s economic growth?
Tourism is a key sector making up 12% of the country’s GDP, according to the U.S. Embassy & Consulate in Thailand. As one of the world’s most visited countries for both leisure and business travel, foreign tourist numbers increased in the first quarter of 2022. The government hopes that easing travel restrictions and promoting the country as a safe destination will attract more visitors and boosts the economy. With this in mind, tourism is expected to rise further in the second half of 2022.
The other key growth sector in Thailand is in exports which make up 60% of GDP. In March 2022, the export sector grew by 19.55% – helped by the weakening baht making exported products more competitive.
The challenges to Thailand’s economic growth
However, despite the strong outlook, various economic challenges need recognition. The slowdown of the U.S. and European economies has been a major setback, and the recent lockdown of China has dealt an even bigger blow, as China is the main source of tourism for Thailand and its #l export market.
Additionally, with inflation currently at an all-time high of 5.73% (higher than original forecasts of 2.4%), primarily due to the increased costs of energy and food, and the ongoing conflict in Ukraine causing supply disruptions, this has put further pressure on the situation.
However, one of the most significant issues affecting Thailand’s economic growth is the lack of skilled workers. Many Thais do not have access to quality education and training. As a result, organisations cannot fill the increasingly skilled positions created in industries such as tourism and manufacturing. In response, the Thai government is working on several initiatives to improve the country’s future skills development, including more opportunities for Thais to study abroad and increasing investment in vocational training.
What organisations can do for business success in Thailand
With the country’s reopening and the economy’s gradual growth, it’s also critical that companies invest in new technologies and training programmes to allow their employees to be at the forefront of their industry. Workforce knowledge and capabilities must also be developed, as well as the upskilling of existing ones. This is critical for companies to compete in the global market and an excellent opportunity to develop their people and become industry leaders.
What organisations in Thailand should focus on to prepare their workforce for the future:
- Innovation and creativity to find solutions that enhance modernisation and differentiate businesses to stay ahead of the curve.
- Digital and technical skills to navigate and manage technology and the growing digital market.
- Virtual and remote working skills to understand how to lead in a hybrid workplace and improve processes and projects remotely.
- Providing tools for efficient ways of working and productivity, even when not in the same physical space.
- Adaptability and flexibility with leaders and employees competent at being agile and open-minded, able to adapt to the ever-changing business landscape.
- Critical thinking skills with employee’s adept at analysing data and information, thinking outside the box, and making decisions quickly and effectively.
- Interpersonal and team-building skills so employees and teams can learn how to better collaborate and communicate with each other to be productive and effective.
Why organisations must remain positive about future economic success in Thailand
Despite the challenges outlined, there are plenty of reasons to be optimistic about Thailand’s economic outlook. The Thai government has been working hard to boost economic growth, and there are signs this is beginning to pay off. With continued effort, it is reasonable to believe that Thailand’s economy will eventually regain its footing. Therefore, as the country emerges from the global pandemic, organisations must focus on preparing, supporting and upskilling their workforce for the future. Only then will Thailand be able to compete and find success on a global scale.
LLM is an award-winning boutique C-suite recruitment & HR consulting agency offering Executive Search, Transition Management and Disruption Management expertise across Asia Pacific. At LLM, we have the experience and expertise necessary in Thailand to help you transform your organisation through your people, and engage talent in a radical way to meet the future of work. Contact Supathra Kuratana our new Senior Client Partner and Business Development Director for Thailand for all your recruitment, training and HR needs at email@example.com.