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- GDP (PPP):
- $651.9 billion
- 6.4% growth
- 2.8% 5-year compound annual growth
- $10,126 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s economic freedom score is 63.3, making its economy the 72nd freest in the 2014 Index. Its score is 0.8 point worse than last year due to continuing declines in labor freedom, the control of government spending, and freedom from corruption. Business freedom has recorded a score decline as well. Thailand is ranked 12th out of 42 countries in the Asia–Pacific region, and its overall score is higher than the world and regional averages.
Over the 20-year history of the Index, Thailand’s economic freedom score has declined by 7.9 points, one of the 20 biggest deteriorations. Rating gains in financial freedom, fiscal freedom, and trade freedom have been overwhelmed by substantial double-digit declines in the rule of law as measured by property rights and freedom from corruption. Progress toward greater regulatory efficiency has been relatively slow. Since 1997, Thailand has been downgraded to the ranks of the “moderately free” economies.
Although economic fundamentals remain relatively solid, serious challenges require deeper institutional reforms. As reflected in the country’s long-term score decline, Thailand’s overall economic freedom remains constrained by institutional shortcomings. The perceived level of corruption has increased, and the legal system remains susceptible to political influence.
Thailand has had 18 military coups since becoming a constitutional monarchy in 1932. The government returned to democratic civilian control in December 2007, but political turmoil has continued. In the July 2011 parliamentary elections, Peua Thai, the opposition party of exiled leader Thaksin Shinawatra, won an outright majority, and Shinawatra’s sister, Yingluck Shinawatra, became prime minister. About 40 percent of the population is engaged in agriculture, but a thriving manufacturing sector, including the manufacture of such high-technology products as integrated circuits, contributes significantly to export-led growth.
Corruption is widespread at all levels of Thai society. The country has an independent judiciary that generally is effective in enforcing property and contractual rights but remains vulnerable to political interference. Private property is generally protected, but the legal process is slow, and judgments can be affected through extralegal means. Infringements of intellectual property rights are substantial.
Thailand’s top individual income tax rate is 37 percent, and its top corporate tax rate has fallen to 20 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden is equal to 16 percent of gross domestic income. Government expenditures equate to 23 percent of GDP. Public debt is equivalent to about 45 percent of the domestic economy.
There is no minimum capital requirement, but incorporating a business takes almost a month, and completing licensing requirements continues to be time-consuming. Reform of the relatively rigid labor market has lagged, and informal labor activity remains substantial. State-owned enterprises (for example, in the utility, energy, telecom, banking, agriculture, and transport sectors) account for more than 40 percent of GDP.
Thailand’s average tariff rate is 5 percent. Tariff-rate quotas, import license requirements, and government subsidies distort trade. Foreign investment may be subject to government screening, and investment in several sectors of the economy is limited. The financial sector, dominated by banks, is relatively small but diversified. State-owned specialized financial institutions have become more prominent. The banking sector remains sound.