A country’s wealth can be tricky to measure. Experts utilize numerous methods to gauge a country’s economic well-being — resulting in many conflicting outcomes. However, some countries can undoubtedly be called poor. So, what about Thailand? Is it being plagued by poverty?
For many economists, Thailand might not be poor. After all, the country’s GDP has been rising after COVID-19. However, the GDP growth is considered minute compared to Argentina, Saudi Arabia, or Indonesia. And in reality, Thai wealth is unevenly spread throughout the country.
As of 2023, it is difficult to say whether Thailand, as a whole, is rich or poor. However, you can’t deny that poverty is one of the country’s most significant obstacles. Read on to learn more about the Thai economic turmoil and the daily struggle of its poor citizens.
Is Thailand considered a poor country?
This question is hard to answer. After all, wealth is relative. It depends on a number of factors like time, territory, and technology. Especially in the post-covid world.
As you know, the global economy has been in a bad shape after the COVID-19 pandemic. Every country across the globe is trying to recover. Only a few have managed to stabilize their commerce, leaving the rest in an up-and-down state. Even powerful nations are still trying to get back to where they were.
So, even if you ask, “is the USA considered a poor country now?” The only clear answer is probably “it’s poorer than before.”
But if you leave the context of COVID-19 behind, how can you determine a country’s wealth in the first place?
But fortunately, economists have discovered a convenient way to answer that: the GDP.
What’s a GDP? (for non-experts)
GDP stands for Gross Domestic Product.
In the most basic sense, it is a number that shows how many products a country generates inside its territory — annually or quarterly. These products can come from physical goods production, trades, investments, and other means.
However, the country’s wealth can’t be determined by looking at the GDP of a single year. Since each country has different sizes, populations, and resources, smaller countries would naturally produce less.
So, a country’s GDP is usually presented in a form of percentages, comparing current year production with the previous one. Any country with positive growth can generally be considered healthy economically. And the opposite is true for the country with a negative value.
Nevertheless, small positive numbers can be bad as well. Why? Because most developing countries aim for multiplying production increase each year to catch up with global trade. So, minimal growth can be inadequate.
Developed countries, on the other hand, can sit calmly with small growth or no growth at all. Their production is already high. No need to sweat it if they couldn’t improve for a couple years.
Basically, GDP can sometimes give you only a vague outlook on the real economic situation of any nation.
How is Thailand’s GDP?
According to the World Bank, Thailand’s GDP is rising at a 1.5% rate in 2021.
Of course, this positive number doesn’t translate to “Thailand is rich.” After all, 1.5% is not ideal for a developing country trying to recover from COVID-19.
But is it that bad? Well… let’s put it this way.
If you look at other countries, you will see the difference. For example, another Southeast Asian nation like Indonesia.
Even though Thailand and Indonesia are in the same region with similar cultures and geography, the latter managed to push its growth to 5.01%. Basically, 3 times more than Thailand.
So in short, Thailand’s 1.5% growth is rather underwhelming. A country with abundant natural resources and somewhat strong tourism should have done way better than this.
And to make it worse, the country’s positive GDP doesn’t reflect the reality of its citizens’ economic struggle that well. Thus, you might want to take a different approach when analyzing Thailand’s wealth.
Why is Thailand not rich?
Short answer: debt.
Even though Thailand has a positive GDP, the country is plagued with severe debt issues. Both on public and household debt.
But what’s the difference between the two? Here’s a simple explanation.
Public debt (or government debt) is the amount of borrowed money the government has made to invest in national projects. Household debt is, of course, the combined (official and recognized) debt of each household in the country.
Both debts have their pros and cons. (Yes, debt is not all bad if you know how to manage it. But that’s entirely another point). However, the current Thai debts seem to be growing out of control. And as a result, it pushed the country down the spiral of poverty.
The Thai public debt
According to the Thai Public Debt Management Office, Thailand has 9,384,171.93 million baht of public debt, as of February 2023. This number has increased from the previous month by 81,645.82 million baht.
Needless to say, that is huge.
However, the problem is not the number itself. After all, these debts can be well-worth if it helps the country develop. However, the government has continuously made questionable spending in the past few years.
The most recent example of weird spending made by the government lies within the construction of the new Bang Sue train station. A brand new station for public transport is nice and all, but the 33 million spent on the nameplate of the building is… strange.
Could they have spent less on the nameplate? The answer is unclear. But many argue they should spend most of this money on a newer and faster train instead.
Of course, you might still remember the unforgettable purchase of militaristic submarines. The incident is still being discussed and debated to this day.
The Thai Household debt
For some Thai families, debt is inevitable.
Since they couldn’t generate enough income to survive the monthly expense, creating debt is their only way out. Otherwise, no food would be put on the table. As a result, the cycle of debt begins.
No money. Borrow. Can’t pay back. Borrow again. Can’t pay it back again. Repeat.
According to the Bank of Thailand, the country’s total household debt in the 3rd quarter of 2022 was 14,903,216 baht. And that was 86.8% per GDP. In short, the Thai economy is in bad shape.
And remember, this is only the value of official debts. No one really knows how much illegal borrowing Thai people have created from suspicious sources. But it’s safe to say, “too much.”
Of course, this is not a statement to say that “Thai people don’t know how to manage money.” Actually, this statement should raise the question, “What is going on with Thai finance?” And one of the most obvious answers is that people are making too little.
What is considered poor, and why is it so difficult to be rich in Thailand?
In your country, your family might be considered wealthy. But if you move to a richer country, let’s say UAE, you might just be average.
In Thailand, the rich and poor are separated by a massive wall. The richest can generate millions per month, while the poorest make a negative per day. Of course, this comparison might be extreme. So, let’s look at the average.
According to the Thai National Statistical Office, the average monthly income per household in 2022 was 27,352 baht. This might sound big. But it is actually way too close to the average monthly expense: 21,616 baht.
And of course, since this is an average number, you can say that about half the country is making less money while spending more.
But why are Thai people’s incomes so low?
The job doesn’t help
The unfortunate thing for Thai citizens is that most jobs in the country have a minimum salary of 15,000 to 18,000. And this is true for both the private and public sectors.
As you can see, 18,000 is only a bit more than half the average expense. This amount of income can be hellish in a big city like Bangkok or Pattaya, where daily expenses are higher than average and can even double in some districts.
The saddest thing about this is probably that this pay rate is legal. Had the government or other related organizations increased the minimum wage, Thai people might have had a better time.
But of course, changing the law is never that simple. There have been several attempts to make a significant increase. However, most projects could only raise the number by hundreds or tens instead of thousands.
This is why most Bangkokians work multiple jobs to keep up with the expense. However, this causes their health to deteriorate, forcing them to pay even more to return to health. So, they could not climb out of the income pitfall that easily.
The government doesn’t seem to be able to solve the problem either. Or at least they couldn’t find an effective and sustainable solution.
Many poor families rely on the monthly monetary aid paid by the government or other related organizations. But of course, the amount they get is far from ideal.
To add insult to injury, not all poor people have access to these aids. Since most poverty-related projects require online or physical registration, people living in rural areas or internet red zones cannot get their hands on this help.
These areas include the outskirts of all regions. But they are usually located in the northern and northeastern parts of the country.
What is the future of the Thai economy?
Truth be told, Thailand’s future is impossible to predict, whether in economics, politics, or even culture.
With the next election in May 2023, many expect the new government to do something about the current issue. However, the result of the election isn’t set in stone.
Political parties seem to pay more attention to the economy than ever before. Some promise to provide more aid to the poor, while others even vow to raise the minimum wage to 25,000 baht. But in the end, nobody knows if they can make what they say come true.
So, this could be the chance for Thailand to boost its wealth. But at the same time, it could give rise to yet another unfortunate moment.
Nevertheless, the Thai economy would not make a drastic change anytime soon. After all, the wound from COVID-19 is still there. All sectors are still trying their best to recover.
In short, it is most likely that the Thai economy will stay in its current state for a while — at least until the next global economic wave.
But this doesn’t mean there is no hope for current Thailand. In late 2022, Thailand saw more tourists than expected during the first quarter. So, tourism might, once again, be the lifeboat to keep Thailand afloat in this dark sea.
If you’re planning a holiday trip while reading this, keep Thailand as one of your destinations. Who knows? A single dime you spend there might save the country and the entire population.
So, Thailand is poor. Right?
Overall, yes. But does that mean the end of the nation? Most likely not.
Even though the country is far from being called rich, it can still get there. Remember. Thailand had a positive GDP in 2021. Although the percentage is minimal, an improvement is still a good sign.
The upcoming election is also a notable factor. The new government might miraculously solve domestic and international debt issues and transform the economy forever.
Or, Thai tourism might come back and save the day again. And you can be a part of that historical save too.
In the end, make sure to keep up with the news on Thailand’s economy. Who knows? Its name might appear on the top of the “World Richest Countries” list one day. (Definitely not today, though)
Like always, if you want to learn more about Thailand, stay with ThaiGuider. You might discover something you never knew about this unique country.
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