Thailand reports weak labour productivity

In the context of its income and development levels.

It has been noted that labour productivity is not generally growing faster in poorer APAC economies as might be expected.

According to a research note from Fitch Ratings, this is based on its Asia-Pacific Sovereigns Chart of the Month for March 2016.

In particular, Pakistan and Thailand report weak labour productivity growth for their income and development levels.

The report also finds China's productivity performance is lagging what was seen in Japan, Korea and Taiwan when those economies were at similar real income levels to China today - even when allowing for slower global productivity growth today than in the 1960s and 1970s.

Here's more from Fitch Ratings:

Mixed Labour Productivity Performance Across Emerging Asia: Poorer countries might be expected to boost output per worker quicker, as it is easier to improve productivity, for example, by importing technology. However, the relationship does not hold for the nine emerging Asian economies in Figure 1. (Exclusions; Malaysia, as it is almost twice as productive as the next-most-productive country; Mongolia for lack of data.) Labour productivity growth in Pakistan and Thailand, in particular, is lagging relative to income levels.

What to Watch: Productivity-enhancing structural reform would be credit-positive for sovereigns. Most emerging Asian sovereigns have a weaker business environment than the global emergingmarket average. Weak productivity growth in Thailand and Pakistan is likely to be related to those countries’ low inward foreign direct investment flows. For China, strengthening productivity closer to the experience of its north-east Asian neighbours during their industrialisation phases would boost prospects for a successful rebalancing.