Economic and Political Overview

flag Thailand Thailand: Economic and Political Overview

In this page: Economic Outline | Political Outline | COVID-19 Country Response

 

Economic Outline

Economic Overview

Thailand is the second-largest economy in Southeast Asia after Indonesia, and with an upper-middle income status, serves as an economic anchor for its developing neighbour countries. The country's economy appears resilient and, according to the IMF, growth was estimated at 2.7% in 2023, slightly higher than 2.6% one year earlier, as the contraction in investment and goods exports caused by the slowdown in external demand partially offset the robust private consumption growth following the tourism recovery. The growth projection for 2024 stands at 3.2%, buoyed by enhancements in external demand and sustained robust growth in private consumption, followed by 3.1% in 2022 (IMF).

Concerning public finances, the IMF anticipates that the general government deficit will rise to 1% of GDP in 2024, up from an estimated 0.3% in 2023. This increase is attributed to heightened expenditure, accommodating initiatives like the digital cash handout scheme and other measures endorsed by coalition parties during the election campaign. These expenditures are expected to outstrip steady revenue collection as growth strengthens. In 2025, the IMF projects a modest increase in the fiscal deficit to 1.2%, mainly driven by sustained social and capital spending. The debt-to-GDP ratio increased to 61.4% last year, from 60.5% in 2022, and is expected to follow an upward trend in 2024 (62.9%). Thailand's robust external position continues to be a fundamental strength, offering a substantial buffer against tightened global financial conditions and geopolitical risks. In 2023, headline inflation reached 1.5%, benefiting from ongoing efforts to maintain low energy prices and enhancements in global supply chains. As growth strengthens in 2024, headline inflation is anticipated to experience a slight uptick to 1.6%.

The unemployment rate remained very low in 2023 (1.2%) and is projected to stay around 1% over the forecast horizon (IMF). Thailand's official unemployment rate is among the lowest in the world due to the low birth rate, lack of social insurance and informal sector employing the bulk of the workforce (street vendors, motorbike taxis and self-employed). The country’s average GDP per capita (PPP) was estimated at USD 20,672 in 2023 by the World Bank. Thailand has made the most progress in ASEAN on eradicating poverty in recent years, with the poverty ratio standing at 6.3% of the population (Asian Development Bank, latest data available).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 495.65514.95548.89573.39605.76
GDP (Constant Prices, Annual % Change) 2.51.92.72.93.0
GDP per Capita (USD) 7,0737,3377,8128,1538,608
General Government Balance (in % of GDP) -3.1-1.6-2.1-2.0-1.8
General Government Gross Debt (in % of GDP) 60.562.464.565.565.8
Inflation Rate (%) 6.11.20.71.21.7
Unemployment Rate (% of the Labour Force) 1.31.21.11.01.0
Current Account (billions USD) -15.746.579.0611.4312.93
Current Account (in % of GDP) -3.21.31.72.02.1

Source: IMF – World Economic Outlook Database, Latest data available.

Note : (E) Estimated data

 

Main Sectors of Industry

Thailand has a labour force of 40.2 million people, out of its 71.6 million population. Its economy is heavily based on agriculture, which contributes 8.8% of the GDP and employs 32% of the active population (World Bank, latest data available). The country is the largest producer of natural rubber in the world and one of the leading producers and exporters of rice; it also possesses sugar, corn, jute, cotton and tobacco among its major crops. Fishing constitutes an important activity as Thailand is a major exporter of farmed shrimp. Traditional farming methods are prevalent, but there's a growing emphasis on modernizing agriculture through technology adoption, such as precision farming and irrigation systems.

The manufacturing sector accounts for 35% of the GDP and is well diversified, employing 23% of the active population (World Bank). The country has established itself as a manufacturing hub in Southeast Asia, attracting foreign investment due to its strategic location, skilled workforce, and robust infrastructure. The Thai industrial sector is diverse and dynamic, encompassing manufacturing, electronics, automotive, and petrochemicals among its key sectors. Emerging sectors within the industrial landscape include renewable energy, biotechnology, and aerospace, reflecting Thailand's efforts to move towards high-value-added industries and technological innovation. Thailand's industrial output declined 5.1% in 2023 due to a significant drop in computer and peripherals, electronic parts, and furniture production (official data).

The tertiary sector contributes to 56.2% of the GDP and employs 46% of the active population (World Bank). Key sectors include tourism, finance, healthcare, education, and telecommunications. Thailand's tourism industry is a major driver of the tertiary sector, attracting millions of visitors annually: according to official governmental figures, the country welcomed over 28 million international visitors in 2023 , generating an impressive income of more than THB 1.2 trillion. The finance sector, centred in Bangkok, serves as a regional financial hub, offering a wide range of banking, insurance, and investment services. Healthcare and education are also prominent sectors, with Thailand being a destination for medical tourism and home to reputable universities and international schools. Emerging areas within the tertiary sector include digital services, e-commerce, and fintech.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 31.6 22.5 45.9
Value Added (in % of GDP) 8.8 35.0 56.2
Value Added (Annual % Change) 2.5 -0.7 4.6

Source: World Bank, Latest data available.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
69,7/100
World Rank:
42
Regional Rank:
9

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.59/10
World Rank:
38/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Political Outline

Current Political Leaders
King: Maha Vajiralongkorn, Rama X (since 13 December 2016) – hereditary
Prime Minister: Srettha Thavisin (since 5 September 2023)
Next Election Dates
Senate: 2024
House of Representatives: May 2027
Current Political Context
Although protests advocating for reforms to the monarchy and the resignation of Prime Minister Prayut Chan-ocha diminished in 2022, the government grappled with escalating public and political dissatisfaction. In July 2022, the Prime Minister and his administration weathered their fourth no-confidence vote since assuming office in 2019.
Throughout much of its coup-prone modern history, Thailand has been governed by a small yet influential clique deeply entrenched in the military, royalist circles, and business elite. However, in recent years, this establishment has faced its most significant challenge in decades, as young people demand extensive reforms. The May 2023 election marked a notable shift, with progressive parties securing widespread support and voters delivering a strong rebuke to the military-backed leadership that has dominated Thailand since the 2014 coup. Furthermore, it marked the first instance in over two decades that a party associated with Thaksin had lost an election. The emergence of newcomers like the Move Forward Party, known for its reformist agenda, garnered substantial support among Thailand's youth.
In August 2023, the Thai Parliament averted a looming political crisis by ultimately selecting a new prime minister, marking the return of one of the nation's most divisive figures after a 15-year self-imposed exile. Thai lawmakers elected real estate mogul and political novice Srettha Thavisin from the populist Pheu Thai party as the country's 30th prime minister. This resolution concluded three months of deadlock, albeit with the party forming a governing coalition alongside its historical military adversaries. Srettha garnered 482 votes out of a total of 747 across both houses of parliament, significantly surpassing the majority required to secure the premiership. It is noteworthy that under Thailand's constitution, which was drafted in the aftermath of the 2014 military coup, the unelected Senate is predominantly composed of military appointees and wields significant influence over the formation of governments and the selection of prime ministers.
Main Political Parties
Thailand maintains a multi-party system, but traditional political parties have seen their role reduced in the parliament since the military-led coup in 2014. Currently, the main parties represented in the House of Representatives are:

- Pheu Thai Party (PTP); centre-right, it is the current majority ruling party.
- Move Forward: Social-democratic, progressive. It is the main opposition party.
- Bhumjaithai: Centrist focusing on rural interests.
- Palang Pracharat: Right-wing supportive of the military establishment.
- United Thai Nation: Nationalist, advocating for Thai interests.
- Chart Thai Pattana Party: Regionalist emphasizing agricultural policies.
- Prachachart: Populist focusing on grassroots issues.
- Pheu Thai Ruam Palang: Factional group within Pheu Thai.
- Chart Pattana Kla: Focused on economic development.
- Thai Liberal: Advocating for liberal policies.
- Democrat: Center-right.
- Thai Sang Thai: Nationalist.
- Fair Party: Advocates for fairness.

Type of State
The Kingdom of Thailand is a constitutional monarchy based on parliamentary democracy.
Executive Power
Thailand is governed by a constitutional monarchy. The King is the Chief of State and the Monarchy is hereditary. Traditionally, he has little direct power but benefits from enormous popular respect and moral authority, which has been used on occasion to resolve political crises and ensure national stability. Official power rests with the government. The Prime Minister is the Head of Government and holds all the executive powers including implementation of the law in the country and running the day-to-day affairs. Under the new Constitution approved in April 2017, individuals outside of parliament can serve as Prime Minister. The cabinet is appointed by the King on the recommendation of the Prime Minister.
Thailand’s 77 provinces each administered by an appointed Governor are divided into districts, sub-districts (tambons) and villages.
Legislative Power
The legislature in Thailand is bicameral. The parliament of the country is the National Assembly. It consists of the Senate (the upper house) with 250 seats, all its members appointed by the Royal Thai Military, under the new Constitution adopted in April 2017, to serve five-year terms (the Senate appointed in 2024 will consist of 200 members elected from various groups of professionals for a 5-year term); and the House of Representatives (the lower house) with 500 seats, its members elected by popular vote to serve four-year terms (375 directly elected through single constituency elections and 125 elected through party-list proportional representation). The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The Government cannot veto the acts passed by the parliament.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
137/180

Source: World Press Freedom Index, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7
Civil Liberties:
5/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Thailand please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: June 2024