Thailand has made significant economic and social progress over the past two decades. To maintain strong and resilient growth, the country needs to improve productivity, while lowering public debt, addressing population ageing, tackling informality and promoting a green transition, according to a new OECD report.
The latest OECD Economic Survey of Thailand projects GDP to grow by 2.0% this year and 1.5% in 2026. Increasing domestic demand and exports, as the peak impact of higher tariffs passes, will lift output growth to 2.6% in 2027. Inflation will remain low.
“After decades of impressive economic and social development, further reforms are needed for Thailand to maintain strong growth momentum,” OECD Deputy Secretary-General František Ružička said, presenting the Survey in Bangkok alongside Thailand’s Minister attached to the Prime Minister’s Office Supamas Isarabhakdi and Secretary-General of the National Economic and Social Development Council Danucha Pichayanan. “Lowering fiscal deficits and public debt, together with measures to tackle informality and boost productivity – by strengthening competition, reducing restrictions on foreign direct investment and scaling back public ownership – are key for strong, sustainable growth as well as social development.”
With population ageing, public spending is set to rise, driven by increasing expenditure on pensions and healthcare. Raising retirement ages and enhancing the contribution of taxes, for example value-added or personal income taxes, to deficit reduction and quality public services will help ensure sustainable public finances.
Further regulatory reforms, including easing restrictions on foreign direct investment and removing barriers to competition, would boost productivity. Creating a level playing field by reducing the dominant role of state-owned enterprises is also key to strengthening productivity in Thailand.
More efforts are needed to tackle informality, one of the Thai economy’s key challenges. Lowering the cost of formal job creation, including through reforms to social protection systems, can foster the creation of formal jobs. Strengthening human capital through education reforms, such as updating school curricula and enhancing vocational training, can also contribute to the formalisation of employment.
Extreme weather events, such as floods and droughts, cause significant damage to Thailand’s economy and communities. Advancing climate adaptation in agriculture, infrastructure resilience and early warning systems would reduce the cost of climate change, while expanding renewable energy sources is important to meeting the country’s climate change mitigation ambitions.
See the Overview of the Economic Survey of Thailand with key findings and charts (this link can be used in media articles).
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For over two decades, the OECD has worked closely with Thailand, including through two phases of a dedicated OECD-Thailand Country Programme since 2018 to support the country's reform agenda. Following Indonesia, Thailand became the second accession candidate country from Southeast Asia in June 2024, and a Roadmap for the Accession Process of Thailand, setting out the terms, conditions and process of the accession of Thailand, was adopted by the OECD Council in July 2024. In accordance with this Roadmap, Thailand will engage in an in-depth technical dialogue with 25 OECD technical committees, composed of expert policy makers from each of the OECD’s Members and the EU, with a view to aligning Thailand’s legislation, policies and practices with OECD standards and best practices covering multiple areas of government policy, including economic policy but also labour market and social policy, education and health.
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