Economic outlook

As a key export-manufacturing hub and tourist destination, Thailand’s economy has suffered from the decline in global trade and international travel due to the COVID-19 pandemic. The IMF estimates real GDP shrank about 7% in 2020.

The relatively effective containment of the virus is now supporting a pick-up in domestic demand, while exports benefit from recovering global demand. Large fiscal stimulus will support a return to growth in 2021. The government has allocated over THB1.9 trillion (US$58 billion, or around 11% of GDP) in the form of cash transfers, soft loans and support for infrastructure projects and small and medium enterprises. Thailand retains ample fiscal space for further stimulus measures, if needed.

Thailand’s 20-Year National Strategy (2017–2036) will continue to underpin the government’s strategy to lifting growth beyond the pandemic. A cornerstone of this initiative is ongoing implementation of projects in the flagship US$50 billion Eastern Economic Corridor (about 10% of GDP) should support a pick-up in private and public investment.

Greater infrastructure development should aid foreign investment and enhance the international competitiveness of high-potential industries, including next generation automobiles and artificial intelligence. But an ageing society, moderate competitiveness and labour skills shortages, if left unaddressed, will weigh on economic growth potential over time. Political unrest and rising protests remains an ongoing risk to business confidence, foreign investment and the economic recovery.

Thailand’s per-capita GDP is above the emerging Asian average, but below neighbours such as Singapore, Brunei and Malaysia. The IMF estimates GDP per capita of around US$7,000 in 2020, and expects incomes to reach about US$9,500 by 2025. Authorities’ plans to raise investment in infrastructure, education and training, if effectively implemented, can help Thailand expand production in higher-value added industries and lift productivity and household incomes.