Growth and Resilience in an Uncertain Global Economy
Edited by Hal Hill and Maria Socorro Gochoco-Bautista
Chapter 12: Thailand
For a country to be able to continue to raise the standard of living of its citizens, its economy must grow continuously. It must achieve a high growth rate and avoid disruptions to long- term growth. Exportled growth policy can help sustain rapid growth provided that external factors are favorable. If the volume of world trade declines, countries that depend mainly on exports will bear the brunt of a worldwide recession. On the other hand, small countries that rely more on domestic markets will miss out on the opportunity to grow quickly when world trade expands. In order to exploit the benefits of the rapid expansion of world trade, an export- led country must maintain price stability that produces low interest rates and incentives to save and invest. Appropriate macroeconomic policy must provide a favorable environment that can sustain domestic demand in light of changing external conditions. This chapter examines how Thailand managed to keep inflation low while maintaining rapid growth between 1961 and 1990. The impact of prudent macroeconomic policy employed during this period is discussed.
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