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. 

Last updated: October 2015

The relationship between Thailand and the World Bank Group (WBG) has changed from borrower-lender to knowledge partners, and from a mostly public sector focus to incorporate a growing private sector focus. The partnership has included and includes work on a range of issues:

  • Fiscal, tax and public financial management;
  • Governance and accountability;
  • Education and skills;
  • Competitiveness, small and medium enterprise/private sector development;
  • Social protection and service delivery;
  • Transport and infrastructure;
  • Environment and climate change.

Broadly, the World Bank Group seeks to address Thailand’s main development challenges by combining knowledge and analysis, and investment and advisory services: (i) to broaden Thailand’s economic competitiveness and global integration by supporting Thailand’s skilled labor industries and the development of a broad-based and efficient physical and financial infrastructure; and (ii) to promote inclusive economic growth, in particular growth and access to opportunity in the rural areas, through investments in microfinance platforms.

In 2015, the WBG will be preparing a Thailand Systematic Country Diagnostic (SCD), a comprehensive research that cuts across development sectors, to identify key challenges and opportunities to accelerate progress in poverty reduction and shared prosperity in a sustainable way.

The WBG’s private sector arm, the International Financial Corporation (IFC) supports investments in renewable energy and in south-south development projects. Given Thailand’s strong manufacturing base and export oriented economic growth model, IFC continues to support supply chain manufacturing in Thailand through investments in Thai operations of foreign manufacturing conglomerates. IFC is also helping Thai companies to grow beyond Thailand's borders.

Last updated: October 2015

The World Bank publishes the bi-annual Thailand Economic Monitor (TEM), which reviews recent economic developments and provides an independent analysis of the near- and medium-term economic outlook. It also publishes analytical work on a range of health and education issues that have supported Thailand’s evidence-based, growth-promoting policies. A recent example is the Wanted: Quality Education for All Report on how raising the quality of education will help increase the skills and productivity of the labor work force and is key to improving Thailand’s competitiveness.

The World Bank works with the Government and the Ministry of Health in delivering analytic and advisory work in identifying key challenges to the sustainability of universal healthcare coverage and how to address these challenges, which include inequality, rising cost pressures, and the country’s transition to an aging society. The World Bank also supports the government to step up effective and cost-effective HIV prevention interventions targeting key affected populations in Thailand. 

The World Bank is currently engaged in a grant-supported program assisting small community organizations in the conflict-ridden south of Thailand since 2006, and renewed in 2014. The activities, ranging from building peace through education and developing effective community approaches to local development, aim to build trust and cooperation between communities and local authorities. Since the 2011 floods that impacted more than 13 million people in Thailand, the Community-based Livelihood Support for the Urban Poor program is helping more than 3,000 households in a total of five provinces (Ayutthaya, Bangkok, Pathumtani, Nonthaburi and Nakhon Sawan) by improving the living conditions of those most affected by the floods.

On the private sector side, IFC has raised $3 billion in financing that benefited more than 65 companies, contributing to Thailand’s economic development and poverty reduction. This includes work to expand microfinance for small and medium enterprises, boost trade, and support projects to mitigate climate change.

In November 2014, Thailand signed a grant agreement with the World Bank Group to assist 12 local air-conditioner manufacturers and 131 foam manufacturers to make their products climate-friendly and production process in line with international good practice.

Among the Southeast Asian countries, Thailand has implemented renewable energy tariffs, strengthening the renewable energy market (pdf), and allowing wind and solar investments to well exceed original targets. Thailand has also been making efforts to promote renewable energy in the heating, power, and transport sectors to diversify its fuel sources and enhance energy security. To identify opportunities for energy efficiency improvement, legislation in Thailand goes further than other neighboring countries in requiring large energy users to undertake energy audits and to submit energy efficiency action plans. The World Bank Group sees the energy intensity of the economy as one of the key challenges in the country, underscoring the importance of support for investments in renewable energy across Thailand. 


Thailand: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments