As many other countries in the region, Thailand and its economic development has taken a big hit due to the COVID-19 pandemic and its effects on global travelling and trade. The tourist-friendly nation has seen an immense drop of international visitors, and manufacturing industries has come to a halt. However, other sectors have utilized on opportunities to thrive, such as food production.
During the past few years, tourism has contributed to approximately 15% of Thailand’s annual GDP, making it one of the country’s main economic drivers. In comparison with other countries in Southeast Asia, Thailand has the largest number of tourists, most of which are from China. However, since the coronavirus outbreak struck China by the end of 2019, Chinese international travelling has been restricted and controlled, heavily affecting the tourism industry of Thailand. As opposed to an expected usual culmination of Chinese tourists during the Lunar New Year holiday in late January and early February, Thailand lost 85.3% of tourist travelling from China in February. Within the two following months, travel bans were imposed on several nations worldwide, diminishing the key industry of the country even further. As a result, Thailand’s tourism revenue recorded a total shrink of 40% during the first quarter of 2020, and the Tourism Authority of Thailand forecasted a 65% decrease of tourists arriving throughout the whole year of 2020.
Thailand’s manufacturing sector´ also suffers from the pandemic, bringing delays to global supply chains and causing massive business disruptions. Specifically, Thailand’s export of manufactured goods plunged to USD 1.9 billion in April this year, a drop by 20.7% from the same month 2019.
Although two of Thailand’s key economic sectors, tourism and manufacturing, were severely affected by the COVID-19 pandemic, food exports have seen a strong increase. In April 2020, overseas food sales of Thai produced goods reached USD 3.17 billion, an increase of 12.9% compared to the same period last year. The share of food exports accounted for 16.3% of Thailand’s total trade in April, the highest proportion since September 1999. One explanation to the rapid increase is that Thailand stands out as it continues to supply rice to the worldwide demands despite the outbreak, while other big exporters such as China, Vietnam and India froze international shipments to secure domestic rice stocks during the worst part of the pandemic. This new-yet-old trend is anticipated to continue at least until the end of this year.
Thailand has long been one of the world’s key suppliers of agricultural products, with rice making up the largest share of 17.5%, followed by chicken, sugar, processed tuna, tapioca flour and shrimp. Although the surge of food production and exports cannot balance out the losses of other key trading sectors, it helps to support millions of people throughout the long supply chains and big agricultural sector of Thailand.
The COVID-19 pandemic has, and will continue to, reorient economic trends in many countries. In Thailand, some major industries have been struck, whereas others have seen an opportunity to grow. Instead of attracting foreign investments into tourism and manufacturing, Thailand has made efforts to engage investors in the food production and processing sector. Until the end of 2020, these fields will continue to be the most promising for investments.
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