The effects of the 2008 Global Financial Crisis on the Thai Economy Essay

The effects of the 2008 Global Financial Crisis on the Thai Economy - Essay Example The crisis that the United States experienced that began way back summer of 1987 made way to the pullback to its economy and the world. Economic recession did a domino effect in the global financial crisis. How ever, as the member of the first world country recovers from the crisis, consequences still felt on some of the fast developing countries like Thailand. Economic recovery globally has been a sudden and immediate focus of the countries among Asian nations. The lost of many jobs are expected to happen in the United States and Europe in the coming year and with regard to this, a higher rate of unemployment is very hard to predict globally. Thailand as apart of the Asian nations would also be affected by the crisis as a whole. With the economy that depends on the exportation and importation, Thailand’s economy will be expected to be tumbling down and in effect would be reducing growth and unemployment. Thailand as a part of the global imbalances as it has been manifested in the recent years, will have to double work considering that it has also its own internal difficulties politically in dealing with the policies with the government. In spite the fact that Thailand’s government has been working so hard and ambitiously aiming to build a stronger economy in the middle of the global financial crisis, confusion and disorder among the people are manifested and has become a serious internal problem between the government and the people. Crisis Impact to the Economy of Thailand There are two financial crises that Thailand experiences with in the span of ten years; 1997-1998 and 2007-2008. The first part of the financial crisis was so damaging and required many years to recover. In fact, upon recovering, the country is able to achieve and attain a higher and promising private investment growth in its economy and established good reputation to be a destination of foreign capital. During this time, the country recorded rapid development and sustained th e growth of economy but still, the financial system shows vulnerability to the shocks of global crisis and became unstable (Ahmed & Islam 2010 ,p.66). The recent crisis which is the 2008 is merely different from the first one. Although in this crisis, Thailand is not much involve in debts compared to last time. Facing the reality that the country cannot escape from the issue of global crisis, in what way does the issue impacts the economy of Thailand? As it has being known that Thailand after the last crisis increasingly depends on the global economy. When the global crisis burst and the damage is felt and seen among some major institutions in the United States and European countries, credit-default is experienced, shocked the financial market, it is expected that that the real and deep effect of the crisis be seen and felt in the industrialized countries. Thailand has not seen and felt the direct effect of the global crisis during the first wave. The second wave of the crisis broug ht panic globally which resulted to freezing in the credit market and the global stock market meltdown. This time, Thailand economy was not able to escape as the stock market index fluctuated where billions of dollars were lost in few months time (Chirathivat 2011). The weakening of the economy transcends business programs between the bank of Thailand and the business firms all over the country during 2008. A serious