Tourism in Thailand and the Strengthening Baht

EconEye Admin

6 months ago

Following the appreciation of baht by 4.5% so far this year, the Tourism Authority of Thailand projects that foreign tourist arrivals will decrease by around 6% this year.—nationalthailand.com

Answer the following questions to check your understanding of the story.

Are the expenditures of foreign tourists in Thailand an export or an import for Thailand?

a) They are both an export and an import.

b) They are an export.

c) They are an import.

d) They are neither an export nor an import.

Wrong! - What is an export? What is an import? Can expenditures of foreign tourists be neither an export nor an import, or both an export and an import?

Correct! - Exports are the goods and services that a country sells to the rest of the world.

Expenditures of foreign tourists in Thailand are an export for Thailand.

Why are fewer tourists expected to visit Thailand?

Fewer tourists are expected to visit Thailand because the appreciation of the baht _____________.

a) makes the Thai baht overvalued

b) decreases the quantity of Thai baht available in the foreign exchange market

c) makes fewer Thai-produced goods and services available for tourists

d) raises the prices that tourists pay for Thailand’s goods and services

Wrong! - Would fewer Thai-produced goods and services be available for tourists and fewer Thai baht available in the foreign exchange market because of the appreciation of the baht? Do we have sufficient information to determine that the Thai baht overvalued?

Well Done! - The value of Thai exports depends on the prices of Thai-produced goods and services expressed in the currency of the foreign buyer. When the Thai baht appreciates, the prices of Thai-produced goods and services rise for foreigners, so fewer tourists visit Thailand.

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