What has happened to Thailand's economy during the past few years has caught many people, government planners included, by surprise. Led by the extraordinary performance of the manufacturing, agricultural, and service sectors, the economy began to move into an upswing cycle in 1987. Stimulated partly by the 1986 world oil price slump, economic growth in 1987 rose to 8.4 per cent from 4.5 per cent in the previous year. In 1988, the economic momentum continued: exceptionally high commodity prices pushed growth in the agricultural sector to 10.21 per cent, and the overall economy grew by 13.22 per cent.

Despite the threat of trade barriers in overseas markets, Thai manufactured exports continued to perform well in 1989. The volume of exports grew 35 per cent in 1989 compared to the previous year. Although imports also grew strongly, the surplus in the service account and the healthy flow of funds from abroad contributed to a balance of payments surplus during the period. Coupled with a strong performance in the other economic sectors, the overall growth rate of the Thai economy was 12.2 per cent in 1989.

Though the economic surge of recent years seems sudden, the Thai economy has, in fact, undergone significant structural changes during the last two decades. From an agrarian society that depended upon a few main crops for export, Thailand has gradually transformed towards becoming a newly industrialized country. The share of agriculture in the GDP has been gradually shrinking and has been surpassed by that of the manufacturing sector.