Drought impacts Thai economy.

Thailand is the second largest economy in Southeast Asia (after Indonesia) and has been having its troubles with environmental shocks. The most widely covered was the Tsunami disaster of December 26, 2004, but much more harmful was a shortened rainy season.

The rains stopped just as the wet season crops were about to be harvested. The rainy season normally runs from April through October but ended about a month early, according to the United States Department of Agriculture (USDA) Foreign Agriculture Service (FAS).

The problem, according to the FAS, was that Thailand's second crop, the dry season crop, which is normally planted under irrigation, was severely affected because reservoirs and streams didn't have enough runoff.

The important rice crop alone was down 1-million tons from the previous year, and 9-million farmers working nearly a million paddy fields were affected. The sugar crop was expected to be 30 percent lower as well. Coffee was affected, too.

The drought was blamed on a weak "warm-episode" El Nino. The FAS, citing the National Weather Service (US) says El Nino is transitioning to neutral and is unlikely to affect weather patterns for the next three months. Light rains have already fallen over Northern Thailand, indicating the wet season may arrive on schedule.

In spite of this shock to its agricultural sector, Thailand's economy performed strongly (and unexpectedly) in the final quarter of 2004, up 1.8 percent over the same period the previous year, according to a March 7, 2005 report carried by the Bloomberg News wire.

Thai consumers were not spending with consumer confidence at an 18 month low in December 2004. Consumer spending was down in that month 1.2 percent over the previous month, again according to Bloomberg News.

On February 23, 2005, South Korea's biggest circulation newspaper, The Chosun Ilbo (Seoul) reported that the Thai Government was going to take up the slack created by low consumer spending with new infrastructure projects. The news was received with skepticism because of Thailand's poor record with corruption. Critics said these projects would likely benefit bureaucrats only.

FAVORABLE ECONOMIC DIVERSITY AND LOW POPULATION GROWTH RATE

The population growth rate for Thailand is well below the regional average, due in part to a birth rate of 14 per thousand inhabitants, eight per thousand less than the average of 22 per thousand for Southeast Asia. Job creation has kept up with growth of the labor force in recent years, and it is likely that the situation will improve further in 2005. Unemployment is running about 2.2 percent, and this may bolster consumer confidence, which has suffered recently from security concerns.

Thailand's population reached 64-million people mid-2004, which amounted to just under 12 percent of Southeast Asia's 548-million inhabitants. According to data released by the Population Reference Bureau (PRB), Thailand's population will reach 70-million 2025. Also, according to that source, Thailand is going to have a population of 73-million people in 2050.

The PRB revealed that a only 31 percent of Thailand's population lived in urban areas during 2004, and that the country's population density is a comparatively moderate 322 people per square mile. Thailand is about the size of Spain, but with half again as many people, and much more rural. Another source of demographic data, the CIA's World Factbook, indicates that 24 percent of Thailand's population was birth-14 years old in 2004, while 69 percent was 15-64 years old, and 7 percent of the populace was 65 years of age and over.

CIA statistics revealed that the country's population growth rate was 0.91 percent in 2004 and the net migration rate was zero.

According to the United Nations Population Division, in the year 2050, 17 percent of Thailand's population will be birth-14 years old, while 56 percent will be aged 15-59, and 27 percent of the populace will be 60 years of age and over.