A weaker currency, such as the baht in Thailand, can have both positive and negative effects on the country’s economy. On the positive side, it can benefit sectors like exports and tourism as Thai products become cheaper for foreign buyers, making them more competitive in export markets. This can help boost Thailand’s exports, which account for about 67 percent of its GDP, and attract more foreign tourists who can spend more on local goods and services, contributing approximately 12 percent to the country’s GDP.
Furthermore, the thriving tourism industry in Thailand also plays a vital role in attracting foreign direct investment, which contributes to the overall growth and development of the country. However, there are also drawbacks to a weaker baht. It makes imports of capital goods and energy more expensive, raising production costs for industries such as manufacturing and pharmaceuticals.
Overall, a weaker currency like the baht in Thailand has both positive and negative impacts on the economy, affecting various sectors in different ways.