As Indonesia and Vietnam grow, the country’s appeal may be fading fast.

The bright lights have returned to Bangkok’s streets, and many Thais are starting to smile again.

The country emerged from 12 months of mourning for the beloved King Bhumibol Adulyadej in October, and it looks like consumers are starting to spend.

Whether or not the optimism applies for the long-term economic outlook, however, is another matter.

Gross domestic product for the quarter through September showed its highest growth in more than four years at 4.3% on the year. Tellingly though, that falls well short of the 7.5% in Vietnam, 6.9% in the Philippines and 5.06% in Indonesia.

Thailand has long been one of the economic powerhouses of Southeast Asia and central to foreign investment strategies for the region. But, worryingly for the country, many companies could soon start looking elsewhere.

Like most of Asia, Thailand was hit hard by the 1997 financial crisis. During the subsequent decade, then-Prime Minister Thaksin Shinawatra busily went about luring foreign, mostly Japanese, automakers, and the country got back on its feet more quickly than most.

According to the International Monetary Fund(IMF), Thailand in 2003 grew more than any other major regional economy at 7.2%, compared with Indonesia at 4.8% and the Philippines at 5%. The country’s per capita GDP was $2,380, more than that of its two neighbors combined.

But the good times did not last. Conflict between pro- and anti-Thaksin groups led to years of turmoil. He was ousted from government in a coup in 2006 and his younger sister Yingluck met the same fate in 2014. Last year, King Bhumibol, who had been pivotal in maintaining stability, passed on.

Since 2013, the pace of growth has slowed to between 0% and 3.2% annually, while neighboring countries have forged ahead. The IMF foresees Thailand leading its neighbors in terms of per capita GDP, which is estimated to reach $7,560 in 2022, but the lead will narrow. Estimates stand at $5,660 for Indonesia, $4,630 for the Philippines, and $3,330 for Vietnam.

Source: Nikkei Asian Review