Last updated: September 2016

Thailand became an upper-middle income economy in 2011. Over the last four decades, Thailand has made remarkable progress in social and economic development, 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. However, average growth has slowed to 3.5 percent over 2005-2015. The government has embarked on an ambitious reform program to raise Thailand’s long-term growth path and achieve high-income status.  

Thailand’s economy grew at an average annual rate of 7.5 percent in the boom years of 1986 to 1996 and 5 percent following the Asian crisis during 1999-2005, creating millions of jobs that helped pull millions of people out of poverty. Gains along multiple dimensions of welfare have been impressive: more children are now getting more years of education, and virtually everyone is now covered by health insurance while other forms of social security have expanded.

Poverty has declined substantially over the last 30 years from 67% in 1986 to 11% in 2014 during periods of high growth and rising agricultural prices.  However, poverty and inequality continue to pose significant challenges, with vulnerabilities as a result of faltering economic growth, falling agricultural prices, and ongoing droughts. Poverty in Thailand is primarily a rural phenomenon. As of 2013, over 80 percent of the country's 7.3 million poor live in rural areas. Moreover, an additional 6.7 million were living within 20 percent above the national poverty line and remained vulnerable to falling back into poverty. Although inequality has declined over the past 30 years, the distribution in Thailand remains unequal compared with many countries in East Asia. Significant and growing disparities in household income and consumption can be seen across and within regions of Thailand, with pockets of poverty remaining in the Northeast, North, and Deep South.

Historically, economic growth has been the key driver of poverty reduction in Thailand. However, GDP grew by less than 2 percent a year in 2014 and 2015. Looking ahead, the World Bank forecasts growth of 2.9 to 3.3 percent for 2016-2018. The rate of economic recovery and reigniting 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.

Long-term economic aspirations are laid out in Thailand’s recent 20-year strategic plan for attaining developed country status through broad reforms. The reforms address economic stability, human capital, equal economic opportunities, environmental sustainability, competitiveness, and effective government bureaucracies. Progress on reforms has already been made. These include the implementation of multi-year large public infrastructure projects, setting up of a State Enterprise Policy Committee to improve state-owned enterprise governance, transfer of supervisory oversight of specialized financial institutions to the Bank of Thailand, approval of progressive inheritance and property taxes and the launch of the National Savings Fund, a retirement safety net for informal workers. Going forward, the sustained pace and quality of reforms as well as sound implementation will be crucial for translating the reform effort into the desired economic outcomes. Continued reforms in additional areas such as education and competition as well as public infrastructure management and government bureaucracies will be particularly important to take Thailand from middle to high income. The World Bank is supportive of the reform agenda.

Last updated: September 2016

The country partnership strategy between Thailand and the World Bank Group (WBG) was established in 2003. The relationship progressed from borrower-lender to a true development partnership, focusing more on knowledge sharing and providing policy advice on the national development agenda.

Today, the World Bank Group engagement in Thailand focuses on economic policy dialogue, private sector/business climate and investment, human capital and skills development, microfinance in rural area, climate change and community driven development approaches in the conflict affected south of the country.

The WBG is currently working on a Systematic Country Diagnostic (SCD) for Thailand, a nationwide study to identify key challenges and opportunities to accelerate 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: September 2016

The World Bank partners with Thailand in meeting challenges that affect people’s daily lives, with support provided mainly through the World Bank’s grant funding in collaboration with local organizations, think tanks and academic institutions.

Currently, the World Bank supports peacebuilding efforts in Thailand’s south through the State and Peacebuilding Fund renewed in 2014. It helped build trust and cooperation between communities and local authorities through education and local development.

Three climate action projects in Thailand are helping to protect the environment. A climate change project is promoting cleaner production of air conditions and foam products to help phase out harmful ozone-depleting global warming gases. Thailand has also joined the World Bank Group’s Partnership for Market Readiness, a global climate change alliance of more than 30 nations, to reduce greenhouse gas emissions and energy consumption. Recently, Thailand received a grant of $3.6 million from the World Bank’s Forest Carbon Partnership Facility to manage and protect the forests.

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 development issues that have supported Thailand’s evidence-based, growth-promoting policies. A recent example is the Wanted: Quality Education for All Report, which highlights how improving education quality can increase labor force skills and productivity.

The World Bank worked with the Government and the Ministry of Health in delivering analytic and advisory work to identify 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 supported the government to step up effective and cost-effective HIV prevention interventions targeting key affected populations in Thailand. 

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.


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

*Amounts include IBRD and IDA commitments