Viewed in retrospect, the Asian economic crisis of 1997 marks a watershed in the pattern of long-term Thai economic growth. Prior to the crisis, Thailand had experienced a lengthy period of significant growth, but the growth rate has subsequently shown a sharp decline. At the present time it seems that slower growth will characterize the Thai economy, at least for the next decade or so.

The purpose of this chapter is to explore aspects of this slower growth. In particular, it analyses the structural changes in the Thai economy that underlie this trend, and also suggests that there are positive features of the Thai economy that will sustain its growth, albeit at moderate rates, in the future.

It is well known, of course, that gross domestic product (GDP) statistics are a blunt instrument for depicting a true picture of economic attainment. Nonetheless, GDP data are the best indicator for the purposes of assessing long-term change and drawing international comparisons, and the chapter therefore uses GDP statistics to give an overall picture of the performance of the Thai economy. Table 13.1 presents figures relevant to long-term trends.

Since the crisis of 1997, Thailand's economic growth rate has been only moderate, and much lower than in the decade before the crisis. Thailand's medium-term growth, as measured by the thirteen-year moving average of annual GDP growth rates during the 2000–2014 period, has been only about 4 per cent. This is a sharp decrease from the 7 per cent or higher that was obtained during the 1963–93 period (NESDB, n.d.).

Short-term factors have certainly contributed to slow economic growth since the late 1990s. The crisis itself was one factor, and there have also been political turmoil, the tsunami of 2004, Southern separatism, the 2008 global economic crisis, various periods of drought and flooding, and most recently the Bangkok bomb blast of August 2015, with its adverse impact on foreign capital inflows and tourism.

International factors have affected, and continue to affect, Thai growth too. The slowdown in China's economy is one factor, and another is the present economic difficulties faced by Russia. The former has considerable repercussions for inward investment, trade and tourism. The latter has had a particularly serious effect on tourism and property markets.