SMEs set to comprise larger proportion of GDP

With strong support from the Thai government, small and medium-sized enterprises (SMEs) are growing in all sectors and should account for a greater proportion of GDP in the coming years.

Salinee Wangtal, director of the Office of Small and Medium Enterprises Promotion (Osmep), said the move signalled SMEs would play a major role in supporting the economy.

In the first nine months of this year, SMEs generated 4.08 trillion baht, up by 4.88% year-on-year, she said.

Ms Salinee said with the uptick, SMEs’ growth in value for the full year was expected to be 3.7% to 4.7%, outperforming GDP growth of 2.7% to 3.2% estimated by the National Economic and Social Development Board.

Growth in SMEs’ GDP proportion in the first nine months of this year has already surpassed the rate of GDP growth, Ms Salinee said.

“We expect this trend will continue and believe SMEs’ GDP proportion will grow beyond GDP growth next year too,” she said.

SME sectors that have surpassed the GDP growth rate are tourism (20.3%), construction (10.6%), logistics (7.5%), health care (6.7%) and retail (6.3%).

Education (3.5%) and real estate (2.4%) grew near the GDP rate.

Some SME sectors underperformed including automotive (-0.5%), machinery (-0.5%), jewellery (-0.5%), garment (-0.5%), foods (-0.5%) and rubber and plastics (-0.5%).

Osmep revealed its trade and service sentiment index for October stood at 102.4 points, up from 87.4 in September.

Ms Salinee attributed government support of the SME sector and stronger SME confidence for the substantial improvement, which could boost the country’s competitiveness.

Osmep set a target for the proportion of SMEs in the country’s GDP basket to rise to 45% in 2021 from 40.9%.

Ms Salinee said Osmep was working on a five-year plan to help support SMEs in the long term.

A master plan is scheduled to be submitted for cabinet approval by mid-2016 for implementation in 2017.

It will focus on nurturing new SMEs that make new products that serve changing world demand.

In other news, the business sector is also asking for more financial assistance from the government to offset the weak global economy.

The sector is requesting another tranche of 100 billion baht in soft loans to help support struggling SMEs and those wanting to expand.