Although the value of Thai exports contracted 2.2 percent p.a. between 2012-2015 due to a slowing international trade, the value of our service exports continued to grow at 7.2 percent p.a., the second highest growth among ASEAN-5 members after the Philippines.That increase was attributable to our thriving tourism that advanced 9.6 percent p.a. during the same period, the highest growth rate of those member states, thanks primarily to increased Chinese tourist arrivals and a persistently weak Baht versus the US Dollar.
Despite the relatively high growth of our service exports, they may only help offset the contraction in overall merchandise shipments, given that the ratio of their value to GDP is not high (about 15 percent of GDP). Assuming that our merchandise exports only expand less than 1 percent p.a. over the next three years (2017-2019), our service exports must grow at least 13 percent p.a. to maintain the overall ratio of export value to GDP at parity with the past five years (2011-2015).
To achieve that growth rate, we at KResearch are of the view that the government should use tourism as a tool because Thailand has the potential to attract more international tourists, given our diversity in tourism resources and a reputation as a good value-for-money tourist destination.
Over the medium-to-long term, however, KResearch is of the view that the government should support other services in tandem with tourism, e.g., construction/professional/transportation services, and creative solutions, while promoting new growth engines to support sustainable economic development.