Overview

  • Last updated April 2019

    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% in the boom years of 1960 to 1996 and 5% following the Asian Financial 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. After average growth slowed to 3.5% over 2005-2015, with a dip to 2.3% in 2014-2016, Thailand is now on the path to recovery. The Thai economy posted the highest growth rate in six years, at 4.1% in 2018, despite external shocks to trade and tourism.

    Poverty declined substantially over the last 30 years from 67% in 1986 to 7.8% in 2017 (as measured by the upper-middle income class poverty line of $5.5/day) during periods of high growth and rising agricultural prices. However, in recent years, progress in poverty and inequality reduction has slowed down, mainly due falling agricultural prices and slower wage growth. This led to low and negative growth in household consumption among the poorer segments of the population and caused a small increase in inequality. As of 2014, over 80% of the country's 7.1 million poor live in rural areas. Moreover, an additional 6.7 million were living within 20% above the national poverty line and remain vulnerable to falling back into poverty.

    Income inequality – as measured by the Gini coefficient – declined less so in recent years. From 2015 to 2017, average household consumption grew by 1.3%. However, among the bottom 40% of the population consumptions shrank by 0.6%. At the same time, income grew in the Central, North and South regions but shrank in Bangkok and the Northeast regions.

    While worsening and stagnating poverty and inequality conditions were seen between 2015-2017, positive indicators are emerging in 2018 that may signal renewed progress in poverty reduction. In 2018, employment increased after four years of decline, led by strong recovery in agricultural employment. In line with rising employment, the unemployment rate was the lowest in eight quarters.

    According to the World Bank Human Capital Index, which measures the productivity level for the next generation of workers relative to their full if all education and health outcomes were maximized, finds that while Thailand scores in the upper half of the various indicators compared to ASEAN countries and other upper-middle income country peers, there remains room for improvement.

    For Thailand, unequal education quality is a big challenge, with poorer areas being underserved. Small under-resourced schools with inadequate infrastructure and education materials are mostly located in poorer regions of the country. A Thai child born today can expect to obtain 12.4 years of school before the age of 18. However, the same Thai child can expect to complete only 8.6 learning-adjusted years of schooling, indicating a learning gap of 3.8 years.

    Thailand has laid out its long-term economic goals in its 20-Year National Strategy (2017-2036) 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.  Recent reforms include the implementation of large multi-year public infrastructure projects related to dual tracking of railways, regulatory reforms aimed at improving ease of doing business, setting up the State Enterprise Policy Committee to improve state-owned enterprise governance, the transfer of supervisory oversight of specialized financial institutions to the Bank of Thailand, the 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.

  • Last updated April 2019

    2019 marks the start of the new Thailand – World Bank Group Country Partnership Framework (CPF) FY19-FY22 which was approved by the Board on November 27, 2018. This year, the World Bank also celebrates the 70th Anniversary of its partnership with the Kingdom of Thailand. Since becoming the 47th member of the World Bank on May 3, 1949, the Kingdom of Thailand and the World Bank Group have built a strong and productive partnership which has evolved from a traditional lending and analytical relationship into an innovative knowledge-based partnership that reflects Thailand’s dynamic middle-income status.

    The overarching goal of the CPF is to support Thailand’s transformation towards an innovative, inclusive and sustainable economy. It has six objectives:

    • Improving the business environment through promotion of competition and innovation
    • Strengthening fiscal and economic institutions
    • Enhancing the quality of infrastructure investments
    • Addressing climate change and water resources management
    • Promoting quality education
    • Supporting inclusion of vulnerable groups, particularly in the fragile, conflicted areas of Southern Thailand

    The CPF is aligned to Thailand’s first 20-Year National Strategy (2017-2036) and the Royal Thai Government’s 12th National Economic and Social Development Plan. Country-wide consultations took place during the preparation of the CPF and have informed its objectives and programmatic priorities.

    The World Bank’s current portfolio in Thailand consists of Trust Funds, and advisory services and analytics (ASA). As of February 2019, total active Trust Funds portfolio amounts to US$29.42 million with activities supporting Thailand’s environment sector and peacebuilding in Southern Thailand. There are 12 active ASAs, of which 5 are active Reimbursable Advisory Services, with a total amount of US$1.32 million, which cover support to macroeconomic analysis, gender, financial sector development, and inclusion.

    As of July 2018, Thailand assumed Chairmanship of ASEAN for 2019, and has requested the World Bank to provide technical support for the marine plastics debris agenda, the human capital and nutrition agenda and on connectivity.

    The International Finance Corporation – the World Bank Group institution that provides financing to the private sector – is guided by its 3.0 strategy framework. Key focus areas for IFC engagement will be (i) infrastructure, with particular focus on leveraging public-private partnerships; (ii) innovation to accelerate access and affordability of reliable broadband services and insurance products; (iii) green growth which places a premium on technology and increased climate finance to help Thailand produce a more resilient growth model; (iv) sustainable cross-border development; and (v) strengthening the enabling business environment so that it helps leverage greater commercial financing which maximizes public resources.

  • Last updated April 2019

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

    World Bank grant-funded projects have supported peacebuilding efforts in Thailand’s south, in which conflict has claimed 6,000 lives since 2004. Implemented in 27 communities, the project in the three southern provinces of Pattani, Narathiwas and Yala helped demonstrate the value of community development and capacity-building to foster understanding and improve the capacity of civil society to effectively engage with the state.

    Another grant-funded project aims to assist the Thai industry to reduce the use of harmful ozone depleting global warming gases. The HCFC phase-out project, which was recently completed at the end of 2018, has enabled more than 80 small and medium size foam manufacturers to change their production technology to non-ozone depleting and low global warming impact alternatives.

    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. Thailand also received a grant of $3.6 million from the World Bank’s Forest Carbon Partnership Facility to manage and protect its forests.

    Under the Reimbursable Advisory Services (RAS) Agreement, the World Bank supported the Office of Insurance Commission’s self-assessment of current insurance regulatory and supervisory practices and provided advice on consistency with international standards. This helped foster an environment for the insurance industry to efficiently expand and to better protect the poor against risks and loss. Other completed RAS work includes improving Thailand’s railway sector, providing advice on Thailand’s doing business reforms, and enhancing the education sector’s public expenditure.

    In the context of strong knowledge-based partnership with Thailand, 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.  The TEM also provides insights on growth-promoting policies such as advancing the digital economy and promoting innovation. Other examples of analytical work include the Thailand Systematic Country Diagnostic (SCD), an assessment of the most pressing challenges and opportunities in ending poverty and boosting shared prosperity, the Wanted: Quality Education for All report, which highlights how improving education quality can increase labor force skills and productivity, and the Economic Inclusion of LGBTI Groups in Thailand report.

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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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A Hackathon Crowdsourced Innovative Solutions to Protect the Ozone

Participants of the 24-hour policy hackathon aimed to solicit new ideas and approaches to develop a bottoms-up policy that will protect the ozone layer.

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Economic Inclusion of LGBTI People

Thailand can become a leader in economic inclusion of LGBTI people, so everyone can share the country’s opportunities.

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Curry Promoting Peace

In Thailand’s conflict-affected deep south, community savings groups are helping to bring people together and build mutual trust.

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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.

Additional Resources

Country Office Contacts

Bangkok
30th Floor, Siam Tower, 989 Rama 1 Road, Pathumwan, Bangkok 10330
Tel: +662-686-8300
Fax: +662-686-8301
thailand@worldbank.org
Washington DC
1818 H Street, NW, Washington DC 20433
Tel: +1-202-473-4709
eastasiapacific@worldbank.org