The next Japan is not China but Thailand
Many people think that China is on the path to becoming the next ‘Japan,’ however a recent study has shown that Thailand is advancing quicker is some ways it’d probably prefer to avoid. Thailand is facing the same demographic as Japan 25 years ago, with its aging population, “it’s on the Japanese path of zero inflation, very low interest rates and a big current-account surplus,” (Economist). The aging population levels are rising fast, and the new work force going forward will be smaller than believed. Thailand “should be investing into infrastructure and machinery,” however there’s a lot of conservatism when looking at economic policies as many believe the focus should be on price stability instead of investment. There has been an increase in migrants from Vietnam and Myanmar, but they’re viewed as hurting the economy and stealing jobs rather than fixing the workforce numbers. “Public investment… shrank last year by 1.2%,” however,” receits from foreign tourists rose by 11.7% in 2017, boosting growth against a backdrop of weak domestic demand.” The country is known to attract tourists for its stunning beaches and outstanding nightlife, however citizens of Thailand have not seen an increase of inflation above 1% and in turn causing a slower economic movement than previously thought or expected.
2 comments:
Even though it is true that public investment shrank from the last year, the numbers for private investment are not given and if an industry like tourism grew by 11.7% in one year, there is probably lots of investment in this sector. The fact that they are keeping inflation low shows that they don't want the economy to get out of control, they are trying to grow at a steady pace without creating a bubble that would cause a recession later on.
It will be an interesting to keep an eye on Japan and see how they continue to grow. AS we know, Japan experienced in economic miracle following WWII, but has since, lagged to China in some areas. I wonder what Japan can do to experience similar economic success as China. Also, knowing Japan is an island, what effect will that have on them in the LR, as usually prices are higher due to higher transportation costs. If prices are extremely high, it may be hard for Japan to experience consumer spending and will have a lack of demand for some goods and services.
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