Overview

Last updated: April 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.     

Thailand’s economy grew at an average annual rate of 7.5 percent in the late 1980s and early 1990s, 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 as incomes have risen.  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.

The Thai economy faces headwinds, and growth has been modest, at 2.8 percent in 2015 after 0.9 percent in 2014, partly on the basis of government consumption and investment, and partly on declining imports. The outlook for 2016 is 2.5 percent. 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.

Last updated: April 2016

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 World Bank Group engagement in Thailand focuses on human capital and skills development, microfinance in rural area, 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 comprehensive study that cuts across development sectors, 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: April 2016

The World Bank partnered with Thailand on issues that affect people’s daily lives, with support provided mainly through trust funds 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.

A climate change project promoted 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.

The World Bank published the bi-annual Thailand Economic Monitor (TEM), which reviewed recent economic developments and provided an independent analysis of the near- and medium-term economic outlook. It also published 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, 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.


LENDING

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

*Amounts include IBRD and IDA commitments