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Economic Outlook
- Growth is projected to slow to 1.6 percent in 2026 before edging up to about 2.3 percent in 2027 as global and domestic demand conditions stabilize while FDI in new industries begin to materialize.
- While goods export growth is expected to normalize in 2026 following a strong 2025, Thailand continues to benefit from its diversified export base, with electronics continuing to expand strongly, partly offsetting declines in agriculture.
- Tourism recovery continues steadily. International arrivals are expected to rise gradually, with a return to pre-pandemic levels by late 2027, supported by improving connectivity, diversified source markets, and higher-value tourism segments.
- The foreign direct investment (FDI) pipeline into new industries is improving. FDI applications nearly doubled in the first nine months of 2025, especially in digital infrastructure, batteries, electronics, and electric vehicle (EV)-related projects.
- Policy reforms can lift growth further. Ongoing reforms to strengthen competition, upgrade skills, rebalance fiscal policy, and address household debt can help shift resources toward more productive activities and reinforce economic resilience.
Advanced Green Manufacturing for Growth
- Manufacturing remains a cornerstone of the economy. The sector accounts for 25 percent of GDP and 16 percent of employment, providing jobs for more than 6.2 million workers.
- Green manufacturing is emerging as a key growth driver. Green goods already account for close to 10 percent of total exports, and are more technologically sophisticated than non-green products, offering a pathway to higher domestic value added and quality jobs.
- Thailand has strong untapped green capabilities. The gap between Thailand’s Green Complexity Index (0.7) and its Green Complexity Potential (1.4) highlights substantial opportunities to expand into more complex, higher-value green manufacturing activities.
- Several green value chains show strong competitive potential.
- Energy-efficient cooling technologies: Thailand is a global leader, accounting for nearly one-third of the global market for reverse-cycle air conditioners.
- Solar photovoltaic products: Rapid export growth reflects Thailand’s competitiveness, with opportunities to expand into higher value-added segments such as cells, inverters, system integration, and related digital services.
- Electric vehicles: The automotive sector, which accounts for 3.1 percent of GDP and employs over 570,000 workers, is well positioned for the EV transition. EV-related value chains already represent 4.3 percent of total exports, and more than 80 percent of auto-parts production can be adapted for EVs with limited modification.
- Green manufacturing can deliver meaningful growth and jobs. Scaling up EVs and parts, solar PV components, and energy-efficient cooling could raise GDP by an additional 2.9 percent by 2035, lifting annual growth by about 0.3 percentage points and increasing employment by around 0.6 percent.