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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Thailand is the second largest economy in Southeast Asia after Indonesia, and with an upper-middle income status, serves as an economic anchor for its developing neighbour countries. The country's economy appears resilient and, according to IMF, is expected to advance at a moderate pace in a post-COVID-19 context, despite domestic political uncertainty. Public investment is projected to remain a key driver, increasing over the next few years, in line with the government’s infrastructure plans to attract private investment and a continued improvement of the tourism sector. Due to the COVID-19 pandemic, the country registered negative GDP growth for the first time since 1998, going from +2.3% in 2019 to -6.1% in 2020. In 2021, the GDP growth rate reached an estimated +1.0%. According to the IMF's latest forecast, GDP growth is expected to reach 4.5% in 2022 subject to the post-pandemic global economy recovery (IMF, October 2021).

Inflation went negative to an estimated  -0.8% in 2020 but reached 0,9% in 2021 and is projected to increase to 1.3% in 2022 and 1.1% in 2023 (IMF, October 2021). The general government balance fell to -4.0% of GDP in 2021 and is projected to come back to -0.4% in 2022. Due to the impact of the COVID-19 pandemic public debt increased to 58% in 2021 from 49.6% in 2020 and is estimated to approach nearly 60% in 2022. The National Strategic Plan (2017-2036) places the emphasis on improving the business environment, boosting the country's competitiveness and long-term economic performance through the development of rail, road, airport, and electricity infrastructures.

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic. The unemployment rate remained very low in 2021 (1.5%) and is projected to maintain itself at 1% in the next two years (IMF, October 2021). Thailand's official unemployment rate is among the lowest in the world due to low birth rate, lack of social insurance and informal sector employing the bulk of workforce (street vendors, motorbike taxis and self-employed).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 544.21501.71e546.22585.59617.04
GDP (Constant Prices, Annual % Change) 2.3-6.11.34.14.7
GDP per Capita (USD) 7,8167,188e7,8098,3568,792
General Government Balance (in % of GDP) 1.2-1.8e-4.0-0.4-0.4
General Government Gross Debt (in % of GDP) 41.049.6e58.059.560.0
Inflation Rate (%) 0.7-0.80.91.31.1
Unemployment Rate (% of the Labour Force) 1.0e2.01.51.01.0
Current Account (billions USD) 38.2117.60e-2.6612.3517.27
Current Account (in % of GDP) 7.03.5e-0.52.12.8

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Thailand had a labor force of 39 million people in 2020, out of its 69.8 million population. Its economy is heavily based on agriculture, which contributed 8.6% of the GDP and employed 31.2% of the active population in 2021 (World Bank, 2022). The country is largest producer of natural rubber in the world and one of the leading producers and exporters of rice; it also possesses sugar, corn, jute, cotton and tobacco among its major crops. Fishing constitutes an important activity as Thailand is a major exporter of farmed shrimp. However, agriculture's contribution to the GDP is declining, while the exports of goods and services have increased.

The manufacturing sector accounted for 33.1% of the GDP in 2021 and is well diversified. It employed 22.5% of the active population (World Bank, 2022). The main Thai industries are electronics, steel and automotive. Thailand is an assembly hub for international car brands. Electrical components and appliances, computers, cement production, furniture and plastic products are also important sectors. The textile sector employs less than a quarter of the active population and is no longer as dynamic as tourism, which has become the main source of foreign currency.

The tertiary sector, including financial services, is rising. It contributed to 58.3% of the GDP and employed 46.3% of the active population in 2021 (World Bank, 2022). Tourism played an ever more important role in the Thai economy until 2020 and the country is waiting for the world's borders to open again to international travel.

The COVID-19 pandemic has had a powerful impact on the global economy since 2020. Nevertheless, the global recovery continues, even if the momentum has weakened towards the end of 2021 and uncertainty has increased as the pandemic resurged, leaving lasting imprints on medium-term performance. The surge in global inflation has investors fretting about future growth, but many economists say price surges will subside, making way for 4.7% global GDP growth in 2022 (International Monetary Fund - IMF, 2022 & Morgan Stanley, 2021). The impact of the pandemic appears to have affected both sides of most sectors and markets in Thailand for the second year in a row - demand disruptions having run up against supply problems - making the short-term outlook uncertain for agriculture, industry and service sectors.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 31.4 22.8 45.7
Value Added (in % of GDP) 8.6 33.1 58.3
Value Added (Annual % Change) -3.4 n/a n/a

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Thailand Baht (THB) - Average Annual Exchange Rate For 1 USD 35.3033.9432.3131.0031.29

Source: World Bank - Latest available data.

 

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Foreign Trade

Thailand is an emerging economy and active member of ASEAN and is very open to international trade, which represented 97.9% of the GDP in 2021 (World Bank, 2022). Main export commodities are vehicles, including parts and accessories  (7.2% of total exports), jewellery (3.1%), crude oil (2.8%) and rubber products (2.4%). Thailand mainly imports crude oil (9.6% of total imports), electronic integrated circuits and microassemblies (4.7%), gold including gold plated with platinum (2.9%), and parts for motor vehicles (6.5%). The International Monetary Fund (IMF) is forecasting an increase of 4.7% in the volume of exports of goods and services of the country in 2022, after an increase of 2.8% in 2021 and a fall of 4.9% in 2020 due to the COVID pandemic, and an increase of 5% of its imports, after an increase of 15.2% in 2021 and a fall of 3.2% in 2020.

In 2021, the country's main export partners were the United States (15% of total exports in 2021), China (13%), Japan (10%), Hong Kong (5%) and Vietnam with 4.9% (Comtrade, 2022). The main import partners were China (25% of total imports), Japan (14%), United States (7.7%) and Malaysia (5.2%). The US-China trade war could hurt Thai exports in the coming years, but the slowdown in China can be counterbalanced by the economic upturn in other markets. On the 15th of November 2020 Thailand has signed the Regional Comprehensive Economic Partnership (RCEP) with 14 other Indo-Pacific countries. This free trade agreement is the largest trade deal in history, covering 30 per cent of the global economy. It includes the Association of Southeast Asian Nations (ASEAN : Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and ASEAN’s free trade agreement partners (Australia, China, India, Japan, New Zealand and Republic of Korea). The RCEP covers goods, services, investment, economic and technical cooperation. It also creates new rules for electronic commerce, intellectual property, government procurement, competition, and small and medium sized enterprises.

According to WTO data Thailand shipped USD 250.2 billion worth of products and services in 2021, while imports of goods and services stood at USD 215.3 billion, giving a trade balance surplus, including services, of USD 34.9 billion.

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 194,668221,519248,201236,260206,992
Exports of Goods (million USD) 215,327236,635252,957246,269231,468
Imports of Services (million USD) 42,19946,38554,66156,56346,563
Exports of Services (million USD) 66,41975,22877,15280,78431,421

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 120.6120.9120.9109.697.9
Trade Balance (million USD) 35,77632,58122,38826,72539,820
Trade Balance (Including Service) (million USD) 56,05156,87744,92251,04724,666
Imports of Goods and Services (Annual % Change) -1.06.28.3-5.2-13.3
Exports of Goods and Services (Annual % Change) 2.75.23.4-3.0-19.4
Imports of Goods and Services (in % of GDP) 53.554.256.050.146.5
Exports of Goods and Services (in % of GDP) 67.166.764.959.551.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 15.97.38.56.04.1
Volume of imports of goods and services (Annual % change) 18.35.35.44.54.6

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Thailand is a member of the following international economic organisations: IMF, Association of Southeast Asian Nations (ASEAN), ICC, Colombo Plan, WTO, Asia-Pacific Economic Cooperation (APEC), G-77, among others. For the full list of economic and other international organisations in which participates Thailand click here. International organisation membership of Thailand is also outlined here.
Free Trade Agreements
Thailand is a member of Regional Comprehensive Economic Partnership (RCEP) signed on 15 November 2020. The complete and up-to-date list of Free Trade Agreements signed by Thailand can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2020
United States 14.9%
China 12.9%
Japan 9.9%
Hong Kong SAR, China 4.9%
Vietnam 4.8%
See More Countries 52.7%
Main Suppliers
(% of Imports)
2020
China 24.0%
Japan 13.3%
United States 7.3%
Malaysia 4.9%
South Korea 3.7%
See More Countries 46.7%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: Maha Vajiralongkorn, Rama X (since 13 December 2016) – hereditary
Prime Minister: Prayut Chan-o-cha (since 25 August 2014, acting since 22 May 2014)
Next Election Dates
Senate: 2024
House of Representatives: 2023
Current Political Context
On March 2019 a general election was held in Thailand for first time since the 2014 coup d’état, under a complex new system that empowered small parties and the military. In July 2019 the junta chief Prayuth Chan-o-choa ordered an end to the military rule but kept the power as Prime Minister. The new civil government focused on addressing the slow economic growth and an ageing workforce. The new government enjoys the support of the royalist-military alliance. A series of protests began in 2020 in response to the Constitutional Court's decision to dissolve the New Future Party which had 81 seats in the lower house. This decision enabled the government to strengthen its majority in this chamber (270 of the 500 seats). In 2021, the demonstrators mainly demanded the reform of the monarchy, in particular of the statute of the sovereign, as well as the rewriting of the constitution of 2017, which gives broad power to the 250 senators, chosen by the army. They are still calling for the dissolution of parliament and the resignation of the prime minister. The authorities refuse to make concessions.
While Thailand has been successful in stemming the tide of COVID-19 infections, the economic impact has been severe since 2020 and has led to widespread job losses.
Main Political Parties
Thailand maintains a multi-party system, but traditional political parties have seen their role reduced in the parliament since the military-led coup in 2014. Currently, the parliament is dominated by the military. The main political parties are:

Pheu Thai Party (PTP); centre-right
Palang Pracharath Party: right-wing, conservatist
Future Forward Party: centre-left
Democrat Party: centre-right
Bhumjaithai Party: centre, populist
Thai Liberal Party: centre-left
Chartthaipattana Part: right-wing, conservatist

Executive Power
Thailand is governed by a constitutional monarchy. The King is the Chief of State and the Monarchy is hereditary. Traditionally, he has little direct power, but benefits from enormous popular respect and moral authority, which has been used on occasion to resolve political crisis and ensure national stability. Official power rests with the government. The Prime Minister is the Head of Government and holds all the executive powers including implementation of the law in the country and running the day-to-day affairs. Under the new Constitution approved in April 2017, individuals outside of parliament can serve as Prime Minister. The cabinet is appointed by the King on recommendation of the Prime Minister.
Thailand’s 77 provinces each administered by an appointed Governor are divided into districts, sub-districts (tambons) and villages.
Legislative Power
The legislature in Thailand is bicameral. The parliament of the country is the National Assembly. Its consists of the Senate (the upper house) with 250 seats, all its members appointed by the Royal Thai Military, under the new Constitution adopted in April 2017, to serve five-year terms; and the House of Representatives (the lower house) with 500 seats, its members elected by popular vote to serve four-year terms (375 directly elected through single constituency elections and 125 elected through party-list proportional representation). The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The Government cannot veto the acts passed by the parliament.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Thailand please visit the Thai Department of Disease Control Corona Virus Disease (COVID-19) website.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Thailand and the current sanitary measures in vigour, please visit the Corona Virus Disease (COVID-19) website and the website of the Thai Department of Disease Control.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of Thai Customs.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Thailand on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For  information on the economic recovery scheme put in place by the Thai government to address the impact of the COVID-19 pandemic on the economy, please refer to the COVID 19 Relief and Stimulus Package summarized by Thai public agency The Eastern Economic Corridor Office of Thailand (EECO) and KPMG Thailand's Government and institution measures in response to COVID-19.
For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Thai government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Thailand in the IMF’s Policy Tracker platform.
Support plan for businesses
For information on the local business support scheme established by the Thai government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity refer to the Ministry of Economy, Trade and Industry's "METI’s Support Measures for Companies Concerning the Impacts of the Novel Coronavirus Disease", the Bank of Thailand's summary of the Government relief measures to alleviate the impact of COVID-19 and its brief on the challanges to resolve the Covid-19 induced economic crisis. Further details are also available on KPMG's website.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document. You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
For the up-to-date information on possible support plans for exporters in Thailand, if applicable, please consult the website of the Ministry of Economy, Trade and Industry's "METI’s Support Measures for Companies Concerning the Impacts of the Novel Coronavirus Disease".
 

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