Philip Hemmings
OECD Economic Surveys: Thailand 2025
Abstract
Thailand’s economic performance has weakened in recent years, following decades of relatively successful catch-up in living standards. Slow post-pandemic recovery in the tourism sector plus structural challenges in some manufacturing sectors are contributory factors along with continued demographic headwinds from population ageing. Developments in international trade policy have added uncertainty to the economic outlook and monetary policy has stepped in to support the economy. Meanwhile, capacity for fiscal policy to boost economic activity has become very limited as the public debt burden is rising. Putting debt on a downward path, while also ensuring adequate social protection, pensions and health systems primarily requires strengthening revenue-raising capacity but also sustained attention to improving the efficiency of public spending.
Thailand has enjoyed decades of relatively successful catch-up in living standards, but growth has been slowing recently, and economic performance has been weak relative to some peer countries, most notably Viet Nam (Figure 1.1, Panel A). Private consumption has contributed strongly to post-pandemic growth in real GDP growth along with net exports (Panel B). However, the pace of output growth remains below that seen prior to the pandemic. Consumer confidence and business sentiment have seen trend deterioration in recent months. Headline inflation has been negative in recent months, partly reflecting decline in food prices and developments in global oil prices. Meanwhile core inflation is close to the lower bound of the central bank’s target band of 1-3%.
Developments in tourism and the manufacturing sector partly explain Thailand’s relatively weak economic performance in recent years. The recovery in the tourism sector following COVID-19 has been slow; only recently have foreign visitor numbers reached those seen prior to the pandemic (Figure 1.1). In manufacturing, the transition away from internal combustion engine vehicles to electric vehicles in the automobile and automobile-parts sector has also affected output growth. Furthermore, domestic spending on automobiles has been compromised, along with other categories of consumer spending, by Thailand's high levels of consumer debt. Debt-related constraints on household spending capacity have increased since interest rates began to rise post-pandemic. In addition, as for many other economies, household spending power has been dented by the surge in inflation of 2022.
Thailand’s recent macroeconomic performance takes place against a backdrop of longer-term structural headwinds and challenges. The population is ageing. In 2000, there were around 10 individuals aged over 64 years for every hundred people aged 15 to 64. By 2023; this had reached 20 individuals. Thailand also faces the green transition, with a need for climate-change adaptation as well as fulfilling commitments in reducing greenhouse gas emissions.
The challenges confronting Thailand's economy have been compounded by high exposure to developments in international trade policy (Box 1.1). Goods exports to the United States represent nearly 20% of all goods trade (Box 1.2) and about 15% of GDP in value terms. The tariff policies have resulted in large fluctuations in merchandise export values in 2025, partly driven by effects from gold exports and the front-loading of exports ahead of the tariffs (Figure 1.1). The latter was echoed by robust growth in the volume of exports in the national accounts data for the first and second quarters of 2025. Third-quarter national accounts data point to a run-down in inventories and a sizeable fall in the volume of imports, notably capital-goods imports. Slowing exports to the United States may be accompanied by curtailed demand from China, given Thailand's role in supply chains for Chinese exports. Meanwhile the manufacturing sector may find opportunities to replace U.S.-bound exports from China (Box 1.1). As elsewhere, higher global tariffs and uncertainties around trade policies are likely to have a negative impact on investment. Key for Thailand will be how tariffs develop relative to those imposed on competitor countries. The tariffs have also brought substantial exchange-rate movements, particularly in the value of the U.S. dollar versus other currencies, including the Thai Baht. Exchange rate fluctuation has been discussed in previous Surveys and linked to rigidities arising from capital market regulation (Table 1.3). The government has taken steps to stabilise the baht following a recent appreciation (Figure 1.2), which was partly linked to Thailand’s trade in gold.
Note: In Panel B, "Other" includes the change in stocks and the statistical discrepancy. Chain volume series are not additive; therefore, the sum of the components is not equal to the displayed totals. In Panel C, a Business (Consumer) Confidence Index above 50 (100) indicates an improvement in business (consumer) sentiment and an index below 50 (100) signals a deterioration. In Panel D, changes in the value of exports can reflect both changes in the price and volume of exports. The surge in export values in early 2025 partly reflected an increase in the value of gold exports, echoing strong increase in the global gold price. Thailand’s jewelry sector imports gold, producing final products for both export and domestic markets (the country is not a gold producer).
Source: CEIC; Bank of Thailand; Office of the National Economic and Social Development Council; University of the Thai Chamber of Commerce.
Source: CEIC; Bureau of Trade and Economic Indices; Bank of Thailand; and OECD calculations.
Global trade policies matter for Thailand
Higher tariffs imposed by the United States have potentially significant implications for the Thai economy. The United States is the top destination in eight out of Thailand’s ten largest export categories, including electronics. Exports to the US represent 15% of Thai GDP, including 4.5 percentage points of GDP in domestic value added embedded in these exports, based on 2020 OECD TiVA data (OECD, 2023[1]). In August 2025, bilateral negotiations resulted in a 19% tariff for most Thai exports to the United States. Regional competitors Viet Nam, Indonesia and the Philippines are now subject very similar tariff levels. Thailand is also affected by sector-specific U.S. tariffs on steel and aluminium imports, automobiles and automobile parts, as well as and solar panel products. Given Thailand’s role in supply chains involving production based in China, and as a competitor to China in some export products, the tariffs imposed by the U.S. on China are also a relevant parameter, as are tariffs on other manufacturing economies such as Viet Nam, Indonesia and Malaysia, in sectors such as semiconductor devices, jewellery, calculating machines, electrical lighting, plastics, and pharmaceuticals.
A potential surge in imports from China
Business concerns have been raised about a potential surge in imports from China as Chinese producers seek alternatives to the U.S. market, which may be disruptive for Thai-based production. This may affect final goods such as televisions, furniture and clothing, but also intermediate products like plastic components, automotive parts and electrical products or raw materials and basic inputs like steel, metal products or plastic pellets. At the same time, lower import prices on inputs may have beneficial effects on producers, while lower-priced final goods may benefit consumers.
Impact on foreign direct investment
The recent developments in trade policies may also affect the prospects for inward foreign direct investment (FDI). Lower demand for Chinese exports could potentially have negative knock-on effects on FDI inflows, for instance in component manufacturing where China is the largest foreign investor in Thailand. Positive effects on FDI inflows could arise from businesses seeking to re-base production in Thailand, notably away from China. Product categories that may experience this include automotive parts and electric appliances.
Source: OECD
1.2.1. Growth will slow in 2025 but pick up in 2026
Diminished international trade and related fallout has lowered Thailand's growth prospects, with real GDP growth expected to decline to 2.0% in 2025 and 1.5% in 2026 (Table 1.1). Activity in the first two quarters of 2025 has been supported by export front loading, but growth has weakened over the second half of the year. Negative effects from international trade policy are expected to continue to work through the economy affecting trade and investment in particular. Consequently, annual output growth will drop to 1.5% in 2026. A recovery in domestic demand and exports as the tariff impacts taper will lift output growth to 2.6% in 2027, slightly above estimated potential. These developments will be echoed in the labour market, with weak employment growth in 2026 and a pick-up in 2027.
Thailand’s largest destination for goods exports are the other countries in the ten-country ASEAN group. Exports to ASEAN, the United States, China and the EU account for a majority of exports. Meanwhile, a majority of goods imports come from China, ASEAN and the Middle East. Exports to China include vegetable products, and plastics and rubbers, while imports largely comprise machinery and electrical equipment and metals. Exports to the United States largely comprise machinery and electrical equipment.
Source: Bank of Thailand.
Source: ASEAN Secretariat, International Merchandise Trade Statistics (IMTS).
Consumer-price inflation will increase gradually during 2025 and 2026 but remain well within the Bank of Thailand’s target range of 1-3%. The surge in inflation over 2022 to 2023 was partly contained by existing price controls on various staples and intermediate inputs (mainly food items) as well as tax reductions on some items (such as fuel). In June 2024, these price controls were continued and extended to air purifiers and vacuum cleaners. While price controls may be an expedient policy solution to a price shock and a means of protecting low-income households, the long-term objective should be to pare back the use of this policy instrument by steadily reducing the range of products subject to controls. Price controls distort relative prices, making for less efficient resource allocation, while reduced consumption tax rates would additionally compromise revenues. Welfare concerns around low-income households are generally better addressed through social benefits, an area where further improvements would help pave the way for removing price controls.
Annual percentage change, volume (2015 prices)
Note: 1. Contribution to changes in real GDP; 2. As a percentage of potential GDP; 3. Refers to the calendar year and therefore differs from the fiscal year deficits published by the Thai authorities. 4. Data cover central government plus additional items, for instance state enterprises.
Source: OECD (2025), OECD Economic Outlook: Statistics and Projections (database) with projections from "OECD Economic Outlook No. 118", November.
1.2.2. Uncertainties around trade tariffs have lessened but remain high
In August, Thailand reached a bilateral agreement with the United States that puts most tariffs at 19%. Regional competitors Viet Nam, Indonesia and the Philippines have the same tariff, or close to it. Consequently, the relative competitiveness among ASEAN economies is broadly preserved; large-scale reconfiguration of value chains less likely. Nevertheless the issues around tariffs remain a key uncertainty for the economic outlook. As described above and in Box 1.1, some downside impact on the economy has already emerged and there is considerable uncertainty around the scale of the direct impact on trade, the indirect impact (for instance via Chinese supply chains) and the impact on investment. As well as adding to uncertainties around the central projection, there are tail risks (Table 1.2), such as very large increases in tariffs imposed on a substantial share of Thailand’s exports.
1.2.3. In the financial sector, risks around consumer and corporate credit remain
Longstanding concern relating to Thailand’s private-sector debt remains. Pre-COVID-19, household and corporate debt was equivalent to around 160% of GDP, as of Q1 2025 it stood at 170% (Figure 1.5). This is sizeable compared with some regional peers such as Malaysia (157%) and Indonesia (40%), but smaller than Singapore (171%). Among households, post-COVID-19 interest-rate increases, and modest real income growth have tempered demand for new credit while also adding to financial strain for existing creditors, thus reducing credit quality. In the business sector, increased borrowing costs have had similar effects. Also, challenges in specific manufacturing sectors have affected credit quality (particularly in loans to small-and-medium enterprises). In addition, some cases of corporate-bond defaults have influenced investor sentiment. Thailand’s share of non-performing loans (NPLs), at 2.9% of total gross loans in 2024Q4, is slightly lower than pre-pandemic levels, but continues to rank higher than in peers like Malaysia (1.8%) and Indonesia (2.1%). A recent increase in NPLs (defined as overdue by more than 90 days), as well as “special mention” loans (overdue by 30 to 90 days), notably among small-and-medium enterprises, should be monitored carefully (Figure 1.5).
Risks to the banking sector from the high debt and reduced credit quality appear limited. Bank capitalisation and loan loss provisions of all commercial banks are sufficient to withstand a severe economic downturn and deteriorating loan quality while maintaining high levels of liquidity, according to stress tests conducted by the Bank of Thailand (BoT, 2024[2]). The latest evaluation put commercial banks’ capital adequacy ratio at nearly 20%, well above the minimum regulatory requirement of 11% and well-ranked among peers (Figure 1.5). Banks’ liquidity coverage ratio, at 200% in September 2023, substantially exceeds the minimum requirement ratio of 100%.
Risks to non-bank lending institutions are somewhat greater. The profitability of non-bank financial institutions (NBFIs) has been trending downwards (BoT, 2024[2]). This is due to rising credit costs linked to deteriorating credit quality, particularly for institutions in the hire purchase business, and since the increase in borrowing rates since the pandemic. Close monitoring of these institutions is needed, not least as linkages with other financial institutions, capital markets, and bond markets mean there are potentially systemic consequences if financial positions deteriorate.
Note: "CHN" refers to Mainland China. Panel A: the 11% line is the BIS capital requirement floor. NPISH: non-profit institutions serving households.
Source: CEIC; BIS; IMF, Financial Soundness Indicators.
Reducing negative risks associated with high levels of household and small-business debt requires action on several fronts. The Thai authorities issued new guidance to lenders in January 2024 (Box 1.3). In addition, there has been a joint effort by the authorities and the private sector to provide schemes for debt rescheduling and settlement (these efforts have most recently included a scheme “Quick Debt Settlement, Move Forward”, see Box 1.3). Combatting risky borrowing also calls for ongoing campaigns to strengthen financial literacy. In addition, there are other potential channels for easing debt-related problems. For instance, restrictions on access to formal bank loans by borrowers who have defaulted may be overly strict (IMF, 2025[3]). Macroprudential steps may also be warranted. To support the property sector, which has been grappling with weak demand, the Bank of Thailand raised the loan-to-value ratio limit in March 2025. This move might be reconsidered if evidence suggests that it is amplifying the negative risks around household debt. Over the longer term, progress on policies that reduce the risk of households borrowing due to financial difficulties would also help, including reducing informal economic activity (Chapter 4) and expanding social safety nets.
New Responsible Lending regulation (effective as of January 2024)
Bank of Thailand Notification No. SorKorChor. 7/2566 provides guidance to lenders on household debt. The guidelines, for instance, stipulate that advertisements must have correct and clear content, that customers receive complete, accurate, and unexaggerated information. The guidelines also state that service providers should appropriately consider customers’ debt repayment ability and make debtors aware of the negative effects of persistent debt and propose debt restructuring guidelines when debtors show signs of repayment problems. (BoT, 2023[4])
“You Fight, We Help” Campaign (launched December 2024)
“Direct Payment, Reserve Assets”, targets borrowers of housing and SME loans under THB 5 million (around USD 143 000), and auto loans of less than THB 800 000 (USD 23 000). Under this measure, debts will be restructured: the debtor will pay a minimum of 50%, 70% and 90% of the original instalment amount in the 1st, 2nd and 3rd year respectively. All interest will be suspended for three years.
“Pay, Deal, Complete”, targets borrowers with debts under THB 5 000 (USD 143) that have become non-performing loans or have defaulted for over 90 days. This measure will allow borrowers to settle the debt by paying 10% of the overdue balance.
Debt assistance scheme “Quick Debt Settlement, Move Forward.” (launched November 2025)
The Finance Ministry, the Bank of Thailand (BoT), and the Thai Bankers’ Association have jointly launched a programme to help small individual debtors with non-performing loans (NPLs) of less than THB 100 000 (USD 2 860) incurred before 30 September 2025. The initiative aims to support over 3.4 million people, representing a combined debt value of THB 120 billion (USD 3.4 billion or 0.6% of GDP). The programme involves debt purchases by designated Asset-Management Companies (AMCs), which then offer restructured repayment plans under favourable terms. This may include waiving all outstanding interest and fees, reducing the outstanding principal, or granting more favourable repayment schedules.
1.2.4. Monetary policy should continue to play the leading role in providing support
The trade-related downturn has contributed to a further easing of monetary conditions. The Bank of Thailand has reduced its policy rate by 100 basis points since late 2024. The rate had been held at 2.5% since September 2023 prior to a 25-basis-point cut in October 2024. Subsequent cuts have brought the policy rate to 1.50%. Inflation expectations appear well anchored, continuing to trend down from the surge in inflation of 2022 and lying just above the centre of the Bank’s inflation target range (Figure 1.6). The ex-ante real policy interest rate has returned to around zero percent. Market real interest rates are considerably higher. For instance, as of November 2025, most commercial bank loan rates for businesses with good financial history and sufficient collateral (“Minimum loan rate”) ranged between 6.5% and 7.5% (Bank of Thailand, 2025[5]), implying an ex-ante real rates roughly between 4.5 and 5.5% (based on inflation expectations of 2%). In the latest annual review of the monetary policy target (December 2024), the target range was left unchanged at 1-3% (the annual review is hard-wired into the monetary policy regime).
The recent policy-rate reductions have reflected a response to the worsening outlook for output growth amid continuing low price inflation. The Bank’s support for economic activity is welcome given the diminished scope for bolstering the economy through fiscal expansion (see discussion below). The Bank should continue to play a leading role in providing support to economic activity, as required, and conditional on developments in price inflation. However, monetary support is not without risks. Lower borrowing costs potentially amplify the risks associated with high levels of private debt. Furthermore, policy trade-offs for the Bank could become more challenging should inflationary pressures re-emerge; low headline inflation outcomes in recent months have been partly attributable to government actions and temporary effects, notably weakening food and oil prices. Monetary policy should remain firmly data-dependent and independent, adding further to the Bank’s credibility. The effectiveness of inflation targeting in stabilising prices without distorting relative prices would be helped if price controls were scaled back, as discussed above.
Note: The ex-ante real interest rate is calculated by subtracting inflation expectation (12-month ahead) from the policy interest rate. Inflation expectations refer to the median rate at which consumers, businesses, and investors expect prices to rise in the future. The median of inflation expectations is released monthly, approximately one month after the reference period, by the Bank of Thailand. It is based on questionnaires distributed to representative firms (samples), which are primarily sourced from the Stock Exchange of Thailand and the Department of Business Development. The samples consist of large, medium, and small firms with registered capital of less than THB 50 million, THB 50 million to less than THB 200 million, and over THB 200 million, respectively. These samples include businesses in the production, trade, and service sectors.
Source: CEIC; Bureau of Trade and Economic Indices; and Bank of Thailand.
Fiscal deficits during and since the pandemic have substantially increased the public debt burden. The pandemic policy response brought a deficit increase from around 2% the GDP to 5% of GDP between fiscal year (FY) 2019 (i.e. between October 2018 and September 2019) and FY2020 (Figure 1.7). Pandemic relief packages announced in April 2020 and in May 2021 added substantially to fiscal outlays. Subsequent deficit reduction has been slowed by relief measures to mitigate the impact of rising energy prices. Indirect subsidies including lower excise taxes on oil, for instance, involved considerable revenue losses of 0.6% and 0.2% of GDP in 2022 and 2023, respectively (Oil Fuel Fund Office, 2023[6]). A series of discretionary cash transfer handouts (Box 1.4), have expanded fiscal deficits by 0.7% of GDP in FY 2024 and around 1% in 2025. These are contributing to an expected increase in the fiscal deficit from 4% in FY2024 to 4.5% in FY2025.
In June 2025, the government approved projects worth THB 115.38 billion to revitalize the economy and strengthen the long-term economic system. The stimulus package covers 481 projects and includes THB 85 billion for infrastructure enhancement, THB 11.12 billion for strengthening productivity and mitigating the impact of U.S. tariffs, THB 10.05 billion for tourism promotion, and THB 9.20 billion for local economic development. According to government estimates, the package will generate jobs for about 7.4 million people. Overall, the initiatives are expected to contribute an additional 0.4 percentage points to output growth. The package is financed through the reallocation budget from the “Digital Wallet” programme, which provided cash transfer to households. As the package falls under the FY2025 annual budget, all projects must be contracted or undergo procurement procedures by the end of September 2025, with full disbursement required by the end of the FY2026 or September 2026.
Furthermore, in October 2025 the government launched a subsidy scheme to support household spending on consumption activities, including retail shops, restaurants, and other participating outlets (the Khon La Khrueng Plus, or Half-Half Plus co-payment scheme). The package is valued at THB 44 billion and is expected to contribute a little under 0.25% of GDP, with the primary objective of boosting economic activity during the fourth quarter of 2025
Source: OECD
Note: In Panel B, the 2025 data is the latest available as of October 2025. In both panels the data refer to Thailand’s fiscal year which runs from October to September.
Source: Ministry of Finance; NESDC; Public Debt Management Office; IMF and OECD calculations.
Public debt is expected to increase to over 65% of GDP in 2025, further distancing it from the pre-COVID-19 level of around 40%. The increased level of the public debt ceiling, 70% of GDP, introduced during the pandemic remains in place (Box 1.5). Successive fiscal plans have pushed out the date at which the public debt burden stops rising (Figure 1.8). The latest fiscal plan, covering financial years (FY) 2027 to 2030, envisages public debt peaking in FY 2028 at 69.8%, just below the 70% ceiling, and declining to 68.2% by FY 2030. The plan entails reaching a deficit of 2.1% of GDP by 2030. The levels of debt are middle ranking in the context of OECD countries. However, they are high for an emerging market economy. As is typical for such economies, Thailand has comparatively low fiscal revenues relative to GDP, which means that debt-servicing costs are a relatively large share of the budget (Figure 1.9). Some analysis suggests that at the current levels of public debt, the risk of a negative economic shock pushing the debt-to GDP ratio into unstable territory has become non-negligible (Box 1.6).
Several fiscal rules apply in Thailand’s central government budgeting, established in the State Fiscal and Financial Discipline Act of 2018. The rules principally aim to ensure prudent budgeting. Aside from the ceiling on public debt as a share of GDP, there are guardrails around foreign-currency debt (with a view to preventing related macro-stability risks), debt servicing and repayment of principal. Changes to these thresholds require approval by the State Fiscal and Monetary Policy Committee, which is chaired by the Prime Minister. As of 2025, threshold changes have included (1) an increase in the public debt ceiling from 60% to 70%, (2) an increase in debt servicing from no more than 35% to no more than 50% of revenue, and (3) a change to the principal repayment rule from a range of 3.5-5% to no less than 4%. The latter was approved by cabinet in November 2025 as part of the Medium-Term Fiscal Framework 2027-2030. The Framework also altered budgeting thresholds around contingency funding and multi-year commitments.
Another rule sets a floor of 20% of the annual government budget for capital expenditure, with a view towards preserving momentum in public investment. Changing this condition requires parliamentary approval. As for similar rules elsewhere, the rule is somewhat weakened by an imprecise definition of capital spending. Also, the threshold must only be fulfilled in the budget approved by parliament, it may not be met ex post.
As underscored in recent OECD analysis (OECD, 2024[7]), differences in context across countries mean there is no ideal specific formula for fiscal rules. Each economy’s budget rules are built upon that nation’s own existing institutions and will reflect its political consensus and attitudes. Rules are frequently asked to meet multiple demands. Those demands – such as supporting public investment while containing growth in overall expenditures – can conflict, and the task of building the rules to reconcile those conflicting demands can be daunting. A key issue in evaluating and designing rules is the trade-off between complexity and simplicity. Numerous and technically complex rules can potentially do a better job in guiding fiscal policy, for instance by allowing for variation over the business cycle. However, this approach is challenging to communicate, may be less widely understood and scrutinised and may result in an erosion of trust. Meanwhile, simple rules risk being overly blunt and, at times, even work against objectives. In the broadest sense, a simple set of budget rules would be built upon concepts and objectives that the public readily understands. Rules should have targets that do not change substantially from year to year and be logically consistent over time. That does not preclude that the pursuit of those objectives may be temporarily suspended in extraordinary circumstances, ideally guided by specific escape clauses.
Source: State Fiscal and Financial Discipline Act (2018): https://www.pdmo.go.th/pdmomedia/documents/2019/Oct/พรบ%20วินัยการเงินการคลัง.pdf
An appropriate sequencing of fiscal policy measures is key. In the near-term, fiscal policy should focus on stabilising the fiscal deficit. Calls for new spending measures, such as support for businesses and households in response to the current slowdown in economic activity should be carefully assessed. Where there is a case for support, the fiscal impact should be contained by ensuring the schemes are tightly targeted and time-bound, and by seeking opportunities to divert funds from lower-priority support measures. The government moved along such lines by curtailing the final tranche of its digital wallet scheme, partly to fund targeted support for infrastructure and exporters (Box 1.4). However, it has also brought in new support for household spending (Box 1.4). Phasing out fuel subsidies would be another candidate for releasing fiscal resources.
Recent analysis by the IMF models how potential economic shocks could affect Thailand’s public debt (IMF, 2024[7]). These estimates point to risks of public debt taking an explosive path once it exceeds a “debt limit” of slightly above 80% of GDP. A modelling of risk from economic shocks suggests that an initial 70% debt burden is consistent with debt remaining below the debt limit with 90% probability, implying a non-negligible risk of explosive debt. Furthermore, the calculation does not incorporate other factors that could unexpectedly push up debt, such as payouts related to contingent liabilities, including for example state guarantees on borrowing. Indicative international evidence (Bova et al., 2019[8]) suggests that, on average, countries make a contingent-liability payout equivalent to 6% of GDP once every 12 years. Overall, this indicative evidence underscores the need for building fiscal buffers by bringing down the debt burden. A lower debt ceiling of 60%, as was in place before the COVID-19 pandemic, could help anchor policy for the medium term.
Fiscal outcomes under successive vintages of fiscal plans
Note: The chart shows the medium-term fiscal plans initially published in December each year by Ministry of Finance. Data refer to Thailand’s fiscal year which commences in Q4 in previous year to that indicated (and ends in Q3).
Source: Ministry of Finance.
Note: Debt servicing comprises both the repayment of principal and interest. Debt servicing as a share of revenue and as a share of GDP align closely because government revenues as a share of GDP generally change by only small amounts from one year to another. Debt servicing also includes fee payments which account for a negligible share of debt servicing costs.
Source: Public Debt Management Office.
Medium-term fiscal policy needs to sustain a strong emphasis on putting public debt on a path towards pre-pandemic levels, with a corresponding reduction in the public-debt ceiling. A return to the 60% debt ceiling that was in place until 2020 would significantly reduce debt sustainability risks and provide buffers for future shocks. If no efforts were made towards fiscal consolidation, public debt would reach very high levels; illustrated by the blue line in Figure 1.10. Extrapolation of the government’s 2027-2030 fiscal plan depicted in Figure 1.8 suggests some containment of public debt, but only slowly (the red line in Figure 1.10). A faster decline is achievable, while accommodating additional spending, through a structural expansion in fiscal revenues and structural reforms that boost GDP growth. The lower line in Figure 1.10 illustrates a potential debt path based on recommendations in this Survey. In the scenario represented by the green line, increased spending on healthcare, pensions, social transfers, education and public infrastructure is offset by near-term increase in VAT and income tax and by modest long-term fiscal gains from improved public-sector efficiency and a further transition from informal to formal economic activity. The scenario also incorporates an illustrative estimate of the impact of reforms to boost real GDP growth (and hence the denominator in the public-debt burden), notably measures strengthening productivity through more competition-friendly product market regulations and accelerating the transition away from informal economic activity.
A review of the fiscal rules should be considered, with a focus on ensuring they help anchor a reduction in the public debt over the medium term. One goal of such a review should be to check that each rule is playing a sufficiently useful role to justify the additional complexity and whether other rules would work better. Thailand’s set of budget rules are unusual in that a debt-ceiling rule is accompanied by auxiliary debt-related rules but meanwhile there is no budget-balance rule. Budget-balance rules, along with debt rules, are the most common ingredients of fiscal rules systems. IMF data on 105 fiscal systems indicate that as of 2021, 75 had both a debt rule and a budget-balance rule, possibly in combination with other rules (Davoodi, Elger and Garcia-Macia D, 2022[9]). Thailand’s unique approach does not necessarily imply that the rules are inappropriate, given the importance of national context in determining which rules work best (Box 1.5). However, it does suggest a review is worth conducting, and such a review could consider complementing the current debt ceiling with a budget-balance rule.
Beyond adding a budget-balance rule, the current debt-ceiling rule could be made more effective. At present the ceiling is “hard” in that the public debt burden is not allowed to surpass the specified limit. A risk of this approach is that the ceiling may be lifted too accommodatively in the event of rising public debt, compromising the rule’s effectiveness in ensuring prudent fiscal policy. A formulation in which public debt can surpass the ceiling but with strong rules around bringing it back below the ceiling may potentially be more effective that the current debt formulation. As regards the other rules (Box 1.5), consideration might, for instance, be given to reverting to previous limits, such as that on debt-servicing costs where the limit was raised from 35% to 50% of revenues in 2024. Establishing regular and systematic public spending reviews may also be an effective way to improve the fiscal position (OECD, 2022[10]).
Note: The fiscal scenarios are as follows: “Current tax and spending structure with future ageing and health costs” takes recent deficit levels as the baseline adding in ageing and health costs over time; "Path based on extrapolation of government medium-term fiscal plans” is an extrapolation of the Medium-term Fiscal Framework 2027-2030 published by Ministry of Finance; "Prudent path with fiscal package and growth impact of structural reforms" illustrates a potential debt-burden path based on recommendations in the Survey. In this scenario increased spending on healthcare, pensions, social transfers and public infrastructure is offset by near-term increase in VAT and income tax and by modest long-term fiscal gains from improved public-sector efficiency and further transition from informal to formal economic activity. The scenario also incorporates a boost from reforms to real GDP growth (and hence the denominator in the public-debt burden), notably reforms around strengthening productivity and accelerating the transition away from informal economic activity.
Source: OECD calculations.
Table 1.5 shows the illustrative fiscal impact of proposed structural reforms in this Survey. Their impact diminishes the deficit, helping bring Thailand’s fiscal deficit to levels that imply putting the public debt burden on a downward path.
Note: 1. Based on estimates in (OECD, 2025[11]) these additional expenditures are in addition to ageing-related additional expenditure in the first line of the table. The revenue potential is estimated as the gap between Thailand’s revenue (as a % of GDP) and the highest revenue country among upper-middle-income countries. 2. Assumes informality is halved in each sector (53% to 26%, on average) and an unchanged ratio of formal to informal wages. The revenue increase is modest as informality is highly concentrated in the (low wage) agricultural sector.
Source: OECD
Table 1.6 summarises potential impacts of selected structural reforms proposed in this Survey. They suggest that these structural reforms could lift Thailand’s GDP by around 5% over 10 years and by around nearly 15% in the long run. These quantifications are illustrative. While other reform proposals in this Survey have GDP implications, not all can be quantified due to modelling limitations.
Note: 1) The result is based on a simulation using the OECD long-term model (Guillemette and Château, 2023[12]). A decline of the PMR index from 2.4 to 1.3 (OECD average) is assumed to take place over a 10-year period. The gradual liberalisation of product markets raises both labour utilisation and labour productivity. The utilisation effect is based on empirical results in (Égert and Gal, 2017[13]) and the productivity effect is based on empirical results in (Guillemette et al., 2017[14]). One important caveat is that this empirical work is primarily based on advanced countries for data availability reasons.
Source: OECD
Thailand needs to look towards a structural expansion in its capacity to raise revenues from taxes and social security contributions. This is needed to stabilise the fiscal deficit as well as to fund emerging medium- to long-term spending pressures. A properly allocated expansion of public expenditure in areas including education, infrastructure and innovation can feed positively into economic output via higher productivity. Improving public healthcare and social protection can directly enhance living standards and address the needs of an ageing population. Increasing fiscal revenue can also be part of a shift away from informal, low productivity economic activity (see Chapter 4).
Comparison of Thailand against other upper-middle-income countries suggests ample scope to increase revenue capacity. Tax and social security revenues relative to GDP are middle ranking, lying above Indonesia and Malaysia but slightly below the Philippines and Viet Nam (Figure 1.11). For instance, Thailand’s revenues from VAT of 3.9% of GDP compare with an upper-middle-income-country (UMIC) average of 6.2% (Table 1.7). Another large potential revenue source lies in personal income taxation. Meanwhile, excise taxes appear to offer the least scope for additional revenue, as Thailand already generates more revenue from this tax source than many other countries.
Total tax revenues (including social security contributions), as a percentage of GDP, 2023 or latest available year
Note: The averages for the Asia-Pacific average (37 economies) and the OECD (38 countries) are unweighted. Australia, Japan, Korea and New Zealand are included in the OECD average and in the average for Asian and Pacific economies. Data for Japan, Korea, and the OECD average are taken from Revenue Statistics 2024 (OECD, 2024). Data for 2022 are used for Japan, as data for 2023 are not available.
Source: (OECD, 2025[11]), primary source OECD Global Revenue Statistics Database (ILO/UN Thailand, 2022[15]).
Note: Data are for the latest available year, 2021. UMIC: Upper Middle-Income Countries. The “first quintile” refers to the quintile of countries with the highest revenues in the relevant tax base, the “second quintile” to the next highest quintile and so on.
Source: (OECD, 2025[11]), primary source OECD Global Revenue Statistics Database (OECD, 2025[16]).
1.4.1. There is scope for increasing VAT revenue
As evident in Table 1.7, expanding VAT remains one of the most promising ways of raising revenue capacity. In terms of impact on economic activity, raising VAT (or other indirect taxes) is also generally regarded as preferable to increasing direct taxation (Johansson, 2016[17]). In 1992, a VAT rate of 10% was introduced in Thailand’s tax code. However, a rate of 7% was initially applied on a temporary basis to help consumers and businesses adjust. This rate was re-applied in response to the Asian financial crisis and has remained in place through successive extensions (Table 1.8). This is a low rate compared to regional peers (where the rate ranges from 7% to 14%) and the OECD average (19.2%). Restoring the 10% VAT rate would be a reasonable first step, as recommended in previous Surveys. VAT revenue is also compromised by an extensive list of exemptions. VAT exemption means that the supplier does not charge the VAT on its outputs and, consequently, has no right to recover the VAT on its related inputs. Thus, the supply chain is not free of VAT but there is “hidden VAT” in the price of the exempt supply (OECD, 2022[18]). Thailand’s exemptions include agricultural products, newspapers and magazines, educational, cultural and medical services, domestic transport, among others (OECD, 2025[11]). Some basic unprocessed food products including meat, fish, eggs, rice, fruits and vegetables are also exempt. Exempting basic unprocessed food products from VAT is not standard practice in OECD countries (OECD, 2022[18]). Furthermore, at THB 1.8 million (approximately USD 51 000), the annual turnover threshold for compulsory VAT registration by businesses is high; around 30% of enterprises fall below it (OECD, 2025[11]). The government is planning to revise the threshold. Such a move could be accompanied by measures to facilitate VAT registration, which is relatively costly for small businesses. Even partial progress in revising the rate of VAT and addressing the exemption and threshold issues could yield substantial revenue increases. For instance, raising the rate of VAT to 10% and removing some exemptions has been estimated to yield 2.4 percentage points of GDP in additional revenue (World Bank, 2023[19]). As a step towards potential VAT reform, the 2027-2030 Medium Term Fiscal Framework, published in November 2025 (State Fiscal Policy Committee, 2025[20]), suggests a two-stage move to the 10% rate in coming years. Specifically, the Framework suggests cancelling 1.5 percent of the reduced rate in 2028 and the remainder in 2030.
Value added tax (VAT) rates in percent, 2024
Note: The Thai standard VAT rate in the Revenue Code is 10%, but it has been reduced to 7% since 1999 by a Royal decree.
Source: (OECD, 2025[11]), primary source OECD Consumption Tax Trends (OECD, 2022[18]).
1.4.2. The property tax reform should be fully implemented
Scope for increased revenue from property tax reform is smaller than for some other tax bases, but nevertheless still worth exploiting. Revenue across all property taxes (including recurrent taxes on immovable property, recurrent taxes on net wealth, estate, inheritance and gift taxes) is 0.4% of GDP in Thailand compared with an OECD average of 1.9% (OECD, 2025[11]). Scope in particular lies in recurrent taxes on immovable property. Reform to the property tax system was initiated in 2019 with the introduction of the new Lands and Buildings Tax Act. However, generous property tax discounts were provided in the wake of the COVID-19 crisis (90% rate cuts in 2020 and 2021, 15% rate cut in 2023). Furthermore, implementation has been problematic, as evidenced by efforts by property owners to classify land as agricultural to avoid the tax. It is estimated that full implementation of the reform could yield an additional 0.1% to 0.3% of GDP in property tax revenue (OECD, 2023[21]; World Bank, 2023[19]; ILO/UN Thailand, 2022[15]).
1.4.3. Scope for increasing revenues from social-security contributions and personal-income taxes
From the perspective of limiting negative effects of tax increase on economic growth, raising revenues through increases in social security contributions or personal income taxation is less preferable to increasing indirect tax such as VAT or property tax. However, as underscored in recent OECD analysis of Thailand’s tax and social security system (OECD, 2025[11]), there are nevertheless good reasons for parametric changes to social security contribution and personal-income tax that would increase revenues while improving the design of the tax system in other respects.
In the case of social security contributions, a low contribution rate, at least for low-income earners, is desirable given the high incidence of informality. However, the contribution ceiling is low, reducing potential revenues from those with higher incomes, where informal activity is less frequent. At present the employee and employer contributions apply from the very lowest incomes, but do not increase beyond a monthly wage of THB 15 000 (USD 450), which is 87% of the average wage in the private sector. This is considerably lower than the equivalent ceilings in other Southeast Asian countries (OECD, 2025[11]), adding to regressivity in the tax system and compromising social-security revenues. Welcome adjustments are scheduled, including an increase in the ceiling to THB 17 500 from January 2026, with further increases planned. The reform will also expand the age-range of social security payment from 15 to 60 years to 15 to 65 years.
In personal income tax, a combination of high thresholds and generous general allowances narrows the tax base. The statutory threshold for the second bracket (the first bracket has a zero tax rate), which has a tax rate of 5%, is set at THB 150 000 taxable income. This is equivalent to a monthly income of THB 12 500 or 71.5% of the average wage. A general tax allowance (50% up to THB 100 000) and a single taxpayer allowance (THB 60 000) increase the effective threshold at which personal income tax is paid to THB 26 214 per month, which is around 1.5 times the average wage. This threshold is much higher than the OECD average, and relatively high for emerging-market economies (Figure 1.13). As a result, around 10% of the workforce are required to pay personal income tax and it is estimated that only about 4% pay the tax.
Income threshold where single taxpayers start paying income tax
Note: Monthly wage data is from the ILO and represents the average monthly earnings of employees. The data is for 2024 or the latest available year. Data on taxable income is sourced from the International Bureau of Fiscal Documentation (IBFD).
Source: International Bureau of Fiscal Documentation (IBFD); International Labour Organization; OECD, Taxing wages 2023.
Distribution of Thai formal employees by wage segments and effective marginal PIT rates, 2024
Note: Bars present the total number of workers (in millions) per wage segment (left axis). The dotted line graph presents the effective marginal PIT rates by wage segments (right axis). Vertical lines indicate the bottom and top PIT thresholds as well as the average wage for private sector employees. The bottom effective PIT threshold accounts for the single taxpayer allowance and the general PIT deductions. On the horizontal axis, monthly wage segments are displayed in Thai Baht.
Source: (OECD, 2025[11]). Data are adapted from Social Security Office Thailand (as of May 2024), Thai Revenue Code (2024).
1.5.1. Ensuring adequate and financially sustainable contribution-based pensions
Thailand’s ageing population raises the importance of ensuring sound social protection and healthcare systems. The fertility rate declined from 1.7 in 2001 to 1.2 in 2023 and the old-age dependency ratio more than doubled over the same period (Figure 1.15). The old-age dependency ratio will continue to rise; by 2040 it is expected to be 41% (United Nations, 2025[22]). Ageing populations imply additional demands in healthcare, pensions and safety net support. As of 2024 healthcare spending accounted for 34% of public spending (2.3% of GDP) and spending on old-age and survivors, 46% (3.1% of GDP) (Figure 1.16). Even abstracting from population ageing, Thailand’s further economic development will likely entail increasing demand for wider coverage and greater provisioning of social security and healthcare as living standards rise in other respects.
Note: The total fertility rate represents the number of children that would be born to a woman if she were to live to the end of her childbearing years and bear children in accordance with age-specific fertility rates of the specified year. The old-age dependency ratio is the ratio of older dependents-(people older than 64) to the working-age population (those aged 15-64). Data are shown as the proportion of dependents per 100 working-age population.
Source: World Bank staff estimates based on age distributions of United Nations Population Division's World Population Prospects: 2024 Revision.
Source: National Economic Social Development Council (NESDC).
Low coverage of contribution-based pensions compromises the adequacy of incomes for the elderly. Thailand’s pension system comprises a contribution-based social security pillar with pension and healthcare coverage funded by the Social Security Fund. In addition, there is a non-contributory pillar funded from general taxation that largely provides coverage for those outside the social security system (Table 1.10). Only around half of employees and the self-employed are in the contributory system. Improving pension provision is related to efforts to transition from informal to formal economic activity, as discussed in Chapter 4.
As it currently stands, the long-term viability of Thailand’s Social Security Fund cannot be taken for granted. Avoiding an unreasonable burden on government finances will require parametric adjustments to the contributory pension system, such as a sizable increase in revenues from social security contributions or an increase in the retirement age. As the Fund was established in 1999 and only started disbursing pensions in 2014 (for those who had contributed at least 15 years), it has been able to accumulate assets worth 11% of GDP, despite modest contributions and a low retirement age. However, the rapidly increasing number of pensioners will put it under strain, which the Fund’s financial returns alone cannot offset. Thailand’s life expectancy at 75 years is already among the highest in the region (Figure 1.17) and comparable to richer OECD economies. Thailand’s 60-year-olds can expect to live a further 22 years in the case of men and 24 years for women. The problem is compounded by the country’s low fertility, which will worsen the old-age dependency ratio. A continuation of the current pension parameters would require total contribution rates to rise above 30% of salaries (ILO/UN Thailand, 2022[15]), unless other financing sources can be identified. Such an increase is unrealistic, not least as it would likely prompt a widespread switch into informality.
Source: OECD
An increase in the retirement age is a key channel to improve the financial sustainability of the pension system (OECD, 2025[11]). There is room to do so as the retirement age is very low. Private sector workers can retire at 55, while civil servants retire at 60, and the non-contributory old-age pension is also available from age 60. Gradually raising the retirement age to 60 or 65 would increase the number of contributors to the Social Security Fund, while reducing the number of beneficiaries. However, there should be some flexibility around the retirement age, subject to actuarial adjustment as is the case for pensions provisions in many other countries. For instance, in the United States where the normal retirement age of the Social Security pension is 67 years, an early pension can be taken at 62 years with a penalty of 30%, and the pension increases by 24% if it is delayed until age 70. In Thailand, as the pension age increases, the maximum contributing period could increase from 35 to 40 years, while keeping the maximum pension rate at 50% (Fraser Institute, 2017[23]).
There is also scope for tying pension benefits more closely to pension contributions. Thailand is the only country in Asia and the Pacific that calculates pension benefits solely on wages earned in the last five years of employment. This has important financial implications (OECD, 2025[11]). The large majority of OECD countries consider wages throughout contributor’s the career, or at least an extended period, in determining pension entitlements (OECD, 2022[24]; OECD, 2023[25]). A short reference period can be useful in a nascent pension system, helping guarantee a reasonable replacement rate with respect to the final salary. But as the pension system matures, it is preferable to move to full – or at least long – reference periods. Long reference periods are also preferable if contributions are raised (including, for instance, an increase in the contribution limit, discussed below). Otherwise, workers who contributed at raised rates in the final years of work may benefit disproportionally, having made lower contributions for many years. In a welcome move, a reform towards career average revalued earnings has recently been announced; it allows for an extension of the reference period over the full career or the best 15 years as a first step. On the other hand, the minimum contribution period to receive a lifetime pension instead of a lump-sum could be reduced from 15 to 10 years, to be more attractive for workers who have had relatively short formal careers.
Note: Only the old-age lump sum beneficiaries who contributed fewer than 15 years of service are considered. Information available on the beneficiaries of lifetime pensions.
Source: (OECD, 2025[11]), adapted from (OECD, 2022[24]).
A brake on increases in entitlements may be needed if increases in the social security ceiling are to strengthen the financial stability of the Social Welfare Fund. An increase in the social security contribution ceiling is a prime candidate for increasing revenues. However, to the extent that there is linkage between contributions and entitlements, a higher contribution ceiling would imply increased outlays. A mechanism that ensures only gradual increase in the maximum pension would help in this regard. This would be particularly useful if the contribution ceiling were increased without also extending the reference period for benefit calculation beyond five years. This latter scenario would imply higher benefits for a generation of pensioners who have paid a lower contribution for much of their working lives.
1.5.2. Bolstering support via non-contributory pensions and cash transfers
A second route to improve pension adequacy is to bolster non-contributory pensions. As of November 2025, the payout range of the Old Age Allowance is THB 600 to 1 000 per month. These benefit levels are well below reference poverty thresholds. The payouts are around 23-38% of the World Bank’s upper middle-income poverty threshold of USD 8.3 per day (in purchasing power terms) (World Bank, 2025[26]). Other financial support, along with in-kind services add to incomes among older cohorts. Nevertheless, increases in benefit levels of the Old Age Allowance may be warranted to ensure the overall package of support meets poverty thresholds.
Coverage of safety net support via the State Welfare Card (Table 1.10) has also seen a welcome expansion. The scheme, introduced in 2017, allows beneficiaries to make purchases of certain goods at designated stores. Previous Surveys have recommended to tighten the targeting of the scheme given evidence on those benefiting from the card. One study estimates that the exclusion rate is around 40%; around 1.4 million poor individuals did not receive the card out of 3.5 million poor (Puey Ungphakorn Institute, 2024[27]). Meanwhile, the leakage rate is approximately 20%, meaning around 10 million non-poor individuals received the card, out of a total of 49 million non-poor people. A review of the qualification conditions for the Card is underway; it will be important that it addresses the problems of leakage and exclusion. Chapter 4 discusses safety net support in the context of informality. The analysis underscores that further work in integrating tax and benefit databases can improve the targeting of social transfers.
Hard-wired, regular indexing of social assistance benefits to living costs should be considered. At present, and as underscored in recent OECD analysis (OECD, 2025[11]), there are no indexing provisions for benefits such as the Old-Age Allowance and the Social Welfare Card. Increases in benefit levels are only implemented via ad hoc measures (such as those described above). Indexing to consumer-price inflation, for instance, would guarantee that the real value of benefits is not eroded over time. Indexing could be used more actively. For example, a multi-year phase of wage-indexing could be used to raise real benefit levels to desired levels.
The fiscal burden of bolstering social security, health and pension systems depends on the policy goals and the time scale over which they would be achieved. Various estimates of increased spending are shown in Table 1.12. Estimates based on shorter time frames appear to be larger. Recent OECD analysis (OECD, 2025[11]) suggests, on average, annual additional outlays of 0.4 percentage points of GDP may be needed in the coming years to expand social assistance spending alone. Meanwhile, a long-term estimate of pension and healthcare costs by the World Bank suggests additional spending of nearly 6 percentages between 2019 and 2050 (i.e. around 0.2 percentage points of GDP each over a 30-year period). These estimates are used for the calculation of additional fiscal costs in the coming years shown in Table 1.5.
1.5.3. Ensuring efficient and appropriately scaled public infrastructure spending
Some refinement to the capital expenditure rule could be considered. As described in Box 1.5, capital expenditures must account for at least 20% of the annual budget and be no less than the budget deficit of the fiscal year. The rule implies minimum public capital spending of around 3% of GDP, which is approximately the average of such spending across OECD countries (OECD, 2023[30]). In practice, however, actual investment generally falls short of this target. While execution of current expenditures has matched budget provisions, the execution rate on planned capital spending is typically around 60-70%. It is estimated that raising capital budget spending to that stipulated in budgets would have a fiscal cost of 1-2 percent of GDP (World Bank, 2023[19]).The government has a committee to monitor budget disbursement, and many instruments are in place to support higher execution rates, including long-term capital investment plans and priority projects to help fast-track implementation. However, co-ordinating budget initiatives across government remains challenging. Also, there is scope to improve policy instruments, including adopting standardised guidelines for project planning, appraisal and implementation. Good examples of these aspects in OECD countries include Australia, Canada, Norway and the United Kingdom. In the United Kingdom institutional responsibility for handling public investment projects sits with the National Infrastructure and Service Transformation Authority which works alongside UK Treasury as the central budget authority. Methodologies on project appraisal and implementation are made widely available.
The low execution rate also suggests that fulfilling the capital spending requirement is challenging amid other fiscal priorities. Requiring the minimum spend in each annual budget also reduces the scope for counter-cyclical fiscal policy, requiring what may be unduly high public investment during economic upturns, and vice versa during downturns. While there is merit in rules that give priority to infrastructure investment, particularly in an emerging-market context, consideration might be given to a multi-year formulation. A review should also confirm whether a 20% spend is indeed a good target in the Thai context.
The administration of public infrastructure development has scope for further improvement (World Bank, 2023[19]). Notably, World Bank analysis concludes there is room for stronger co-ordination and harmonisation in infrastructure planning and improvement in procurement processes. There is some centralised steerage on policy; notably, the National Economic and Social Development Council (NESDC) provides recommendations on infrastructure projects. Nevertheless, Thailand would potentially benefit from introducing an independent body for appraising infrastructure investment. Such a body could, for instance, be modelled on Korea’s Public Investment Management Appraisal Centre (PIMAC) that advises the Ministry of Strategy and Finance on the technical aspects of project appraisals. Brazil has similar positive experiences with its centre-of-government infrastructure planning agency, the PPI, that prioritises and coordinates infrastructure projects (OECD, 2023[31]). Reflecting a desire to improve infrastructure financing, the 2027-2030 Medium Term Fiscal Framework (State Fiscal Policy Committee, 2025[20]) recommends that budget units look more closely to off-budget funding through loans and public-private partnerships, as well as utilising Thailand’s Future Fund.
1.5.4. Improving the efficiency of the public sector
Strengthening the efficiency of the public sector can help achieve goals in deficit reduction through cost savings and bring improvements in service quality. The latest National Economic and Social Development Plan (NESDC, 2022[32]) acknowledges shortfalls in the efficiency of government on a range of fronts including cumbersome government structure with a wide range of agencies with overlapping functions and lack of integration, weak cross-sectoral collaboration, insufficient capacity to support e-government and challenges in attracting young professionals to the public sector. The Plan also recognises that many laws related to the public sector are outdated. Proposals to address the issues align with recommendations made in OECD Surveys and other analysis. The proposals include greater use of outsourcing, increased transparency, further digitalisation and development of e-government and abolishing unnecessary regulation and laws.
Exemplifying on-the-ground progress, there are welcome developments in using digitalisation to improve healthcare. Roll out of a new phase of the Universal Health Coverage (UHC) programme began in January 2025. The programme aims to strengthen healthcare coverage across Thailand (the “treatment anywhere” 30-Baht universal scheme). This latest phase of the programme includes new steps in digitalisation. A key element is introduction of personal health IDs to facilitate individuals’ access to health records and services and enable better coordination across healthcare providers. The system will include online booking, digital referrals and expansion of online consultations.
Impetus for reform in the public sector may be helped by the greater use of quantitative targets. The public sector efficiency chapter of the latest National Development Plan (NESDC, 2022[32]) identifies just two numerical targets (at least a 90% satisfaction level for public services and ranking of at least 40 and a score of at least 0.82 in the UN’s e-government development index (as of 2024 Thailand ranked 52 and had a score of 0.84). While quantitative metrics are inherently imperfect in measuring progress in delivery on public sector services they can nevertheless serve as good yardsticks and motivators for progress.
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