Thailand economy damaged by supply chain uncertainty
The aftershocks of the 9.0 earthquake that rattled Japan earlier this year are still being felt throughout the Far East.
Thailand, Southeast Asia’s second-largest economy, has seen its gross domestic product decrease this year, following a 2 percent rise last year.
Supply chain disruptions in the automotive manufacturing industry are in part to blame, as the country’s GDP fell 0.2 percent in the first quarter of this year. Toyota and Ford both own manufacturing plants in Thailand, which is one of the fastest-growing carmakers in the world.
The expansion of the automotive industry has also led to a booming domestic steel business, but both industries figure to take a tumble following supply chain woes.
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Slumping markets in the United States and Europe could mean more bad news for Thailand, as the company relies heavily on exports to developed nations.
Exports account for more than two-thirds of Thailand’s GDP. The country was once the fastest growing economy in Southeast Asia, but that title could be shifted to China if exports continue to drop.
Thailand exports grew by 19.2 percent in the second quarter, which was a big drop when you consider that exports grew by 27.4 percent in the first quarter. If Thailand’s economy continues to shrink, neighboring developing nations Laos, Burma and Cambodia could also see their economies tumble.