Last updated: October 2015
Thailand became an upper-middle income economy in 2011. Over the last four decades, Thailand has made remarkable progress in social and economic issues, moving from a low-income country to an upper-income country in less than a generation. As such, Thailand has been one of the widely cited development success stories, with sustained strong growth and impressive poverty reduction, particularly in the 1980s.
Thailand's high economic growth at 8-9 percent per year during the late 1980s and early 1990s was interrupted by the "Asian Crisis" of 1997-1998. Since then, average annual economic growth has moderated to less than 4 percent. This moderation reflects a combination of some decline in export competitiveness to newly emerging regional economies, a shortage of skilled labor and knowledge workers for the modern knowledge economy, and political changes and uncertainty that have affected public and private investment. More recently, Thailand’s economy expanded by a low 0.9 percent in 2014 and is expected to pick up slightly in 2015-2017.
The rate of recovery and reigniting economic growth, will depend on how fast Thailand can overcome factors constraining growth and promote a more inclusive growth model. There are opportunities in the horizon, including expanding trade through enhanced integration with the global economy, bolstering growth by implementing transformative public investments to crowd-in private capital, stimulate domestic consumption, and improving quality of public services across the entire country. This will support a resumption of higher, more balanced, growth path that eliminates extreme poverty and boosts shared prosperity for all citizens.
Thailand is likely to meet most of the Millennium Development Goals (MDGs) on an aggregate basis. Maternal mortality and under-five mortality rates have been greatly reduced and more than 97 percent of the population, both in the urban and rural areas, now have access to clean water and sanitation. At the same time, there are concerns about environmental sustainability.
Poverty has declined substantially over the last 30 years from 67% in 1986 to 11% in 2014 as incomes have risen. Poverty in Thailand is primarily a rural phenomenon, with over 80 percent of the country's 7.3 million poor living in rural areas (as of 2013), though a third of the poor are now in urban areas outside of Bangkok as well. Some regions—particularly the deep South and Northeast—and some ethnic groups lag greatly behind others, and the benefits of economic success have not been shared equally, especially between Bangkok, Thailand’s largest urban area, and the rest of the country. Income inequality and lack of equal opportunities have persisted. Income inequality, as measured by the Gini coefficient, has fallen in recent years, but stays consistently high above 0.45.
Thailand introduced its Universal Health Coverage Scheme in 2001 and has largely achieved its goal of providing access to affordable health care for all. Thailand’s poorest families have benefited from a declining trend in the incidence of ‘catastrophic health expenditures’ or out-of-pocket payments exceeding 10 percent of total household consumption expenditures.