Overview

  • Last updated April 2017

    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 1960 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 7.2% in 2015 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 2014, over 80 percent of the country's 7.1 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 2.5 percent a year in 2014 and 2016. Looking ahead, the World Bank forecasts growth to pick-up 3.2 percent for 2017.

    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 improving business regulatory environment, 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 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. Reversing the relative erosion of competitiveness, improving effectiveness of the public sector, and improving education and skills will be particularly important to take Thailand out from middle to high income status. The World Bank is supportive of the reform agenda.

  • Last updated: April 2017

    The World Bank Group and Thailand relationship has progressed to a knowledge partnership, focusing more on knowledge sharing and providing policy advice on the national development agenda. Thailand became a donor to the International Development Association in 2014.

    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 World Bank Group’s newly issued  Thailand Systematic Country Diagnostic (SCD) “Getting Back on Track: Reviving Growth and Securing Prosperity for all” lays out opportunities for Thailand to restart its economic engine and renew growth that is inclusive, benefiting all people in Thailand, and green, environmentally sustainable.

    Building on the Systematic Country Diagnostic report, the World Bank Group is now engaging with government, civil society, private sector, academia and other stakeholders to prepare a new Country Partnership Framework, a vehicle in which the World Bank Group can be an effective partner with Thailand’s long-term development plans over the next few years.

    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: April 2017

    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’s strategic focus aligns with two critical priorities in Thailand. The first aims at peacebuilding efforts in Thailand’s south through community participation and local development initiatives.

    The second aims to protect the environment through three climate action projects in Thailand. 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 Thailand Systematic Country Diagnostic Report, an assessment of the most pressing challenges and opportunities in ending poverty and boosting shared prosperity, and 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.

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LENDING

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

*Amounts include IBRD and IDA commitments



PHOTO GALLERY

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In Depth

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Unheard Voices: Men and Youth in Thailand’s Deep South

Conflict in Southern Thailand has claimed over 6,000 lives since 2004.

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Closing the Health Gaps for the Elderly in Thailand

A study shows a significant drop in the elderly using Thai health services, improving measures to facilitate travel can help access.

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Early HIV Testing and Treatment Saves Lives

HIV has hit Thailand hard – especially among men who have sex with men (MSM), increasing free testing and treatment services can help.

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Uncovering Thailand’s Small School Challenge

Despite Thailand’s success in expanding education, research suggests that more needs to be done to maximize students' potential.

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Youth Group Builds Peace through Education

Communities in conflict-affected areas of southern Thailand help build peace through education in more than 2000 schools.

Additional Resources

Country Office Contacts

Bangkok
30th Floor, Siam Tower, 989 Rama 1 Road, Pathumwan, Bangkok 10330
Tel: +66 2686 8300
bsangarun@worldbank.org
Washington DC
1818 H Street, NW, Washington DC 20433
Tel: +1 202-473-4709
eastasiapacific@worldbank.org