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How is Thailand’s growing economy affecting expats?

  Data

Based on what I had heard from people that had visited Thailand, I had always been under the impression that the country was extremely cheap to visit, and presumably therefore, to live in.  So I was surprised that our most recent Cost of Living press release reported that Bangkok had risen 32 places in our rankings to enter the top 100 most expensive locations for the first time. This means that Bangkok is now a more expensive location to live in for expats than major cities such as Berlin, Madrid and even London!

Just last year, Bangkok was once again named the most visited city in the world, receiving 20.05 million visitors to its shores in 2017. So, has the cost of living in Thailand finally caught up with the sheer number of people visiting and living in the south-east Asian nation? 

I recently visited Bangkok, Chiang Mai and Pattaya for ECA International’s latest Cost of Living Survey and, despite the cheap pad thai and street curries on offer at most corners, I did find Thailand to be more expensive than I was expecting.

When International Data Researchers such as myself collect prices for a basket of goods and services, we always do so with a consistent standard of living in mind, and therefore we often inevitably tend to target imported goods and internationally recognised brands. Our data looks at the cost of living for the average overseas assignee, and this is perhaps why tourists and backpackers may find day-to-day living in Thailand cheaper than most expats.

The growing Thai economy has meant that there is no shortage of home comforts now available in Thailand. Visitors to the country will recognise many Western chains and brands, and Bangkok in particular boasts fantastic shopping centres such as the Siam Paragon and Central World malls. 

Most supermarkets in Thailand now offer many of the home goods that assignees may have previously not been able to purchase, albeit at a price. A box of Twining’s teabags in Thailand will set you back 218 Thai baht (around GBP 5.21), or a jar of Nescafe Gold instant coffee can cost you 307 baht (around GBP 7.33!). An expanding economy and a stable political landscape have meant that the Thai baht has strengthened in recent years, and this, in effect, has tightened the purse strings of any expat whose salary is paid in a foreign currency.

Furthermore, our Locations Ratings team ranks cities around the world on a number of different ‘liveability’ factors. In our most recent survey, Thai cities surged up the rankings, with Bangkok leading the way in 89th place. Thailand has seen big investment and improvements to its infrastructure, with the Thai government believing that expanding transport networks in the country is key to further economic growth. Advances in road and transport infrastructure have already greatly improved access to areas in the country that were once considered far more remote. 

Indeed, I found that contrary to what many tourists may believe, rickshaws and tuk-tuks are not the only away to get around in Thailand. The MRT (subway) in Bangkok was very easy to navigate and covered most areas of the city. Uber also recently sold its ride-hailing service in South East Asia to Grab, which proved to be a reliable option not only in the capital, but in Pattaya and Chiang Mai too.

However, with a growing economy and greater numbers of visitors and residents come other setbacks. Despite Bangkok being named the most liveable city in Thailand, our Location Ratings team scored the capital significantly lower than Pattaya and Chiang Mai when it came to air quality. Bangkok has long been considered one of the worst locations in the world for peak hour gridlock and over time, the excessive traffic has resulted in extreme levels of air pollution. Poor air quality is a problem in most major Asian cities, and one that shows little sign of ending. It has even resulted in companies offering a range of inventive new perks such as pollution bonuses and ‘smog breaks’ in a bid to lure expats to locations with high levels of air pollution, as our Asia Director has recently discussed.

Pollution seemed to be much less of an issue away from the hustle and bustle of Bangkok. Pattaya, by contrast, is a coastal city where the air is much fresher, there’s plenty of open space, and traffic congestion didn’t seem to pose a problem. Pattaya has been identified as an important tourism hub in Thailand and the local authorities have concentrated their efforts on improving the city’s public image with measures such as increasing the safety and quality of the beaches, which are a popular attraction for locals and visitors alike.

Another contributor to both the expanding economy and the increase in cost of living is the rapidly-rising salaries in south-east Asia. Last year our remuneration team forecast that salaries in Thailand will have one of the highest real increases in the world over the next year. This growth means a rise in disposable income for Thai residents and results in people being able to spend more of their pay on goods and services - something which only serves to heighten the ongoing rise in the cost of living.

Thailand, along with many other nations in south east Asia, is going through a significant period of economic growth and development. Improvements to infrastructure and better transport links, along with an increase in foreign investment, have resulted in more expats than ever living and working in Thailand. However, with this expansion comes inevitable economic consequences, and residents will have to get used to the escalating cost of living which shows little sign of abating. Thailand is a beautiful country with vibrant cities, outstanding food and a fascinating culture, and I have no doubt that the country will continue to attract investment and assignees long into the future. 

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