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- GDP (PPP):
- $602.1 billion
- 0.1% growth
- 2.6% 5-year compound annual growth
- $9,396 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s economic freedom score is 64.1, making its economy the 61st freest in the 2013 Index. Its score is 0.8 point worse than last year due to declines in four of the 10 economic freedoms, including labor freedom, the control of government spending, and freedom from corruption. Thailand is ranked 10th out of 41 countries in the Asia–Pacific region, and its overall score is higher than the world and regional averages.
Thailand’s movement toward greater economic freedom has stalled after four years of steady improvement. Although economic fundamentals remain relatively solid, serious challenges require deeper institutional reforms. Political instability continues to undermine the investment climate and hold economic activity far below potential levels. The judicial system remains vulnerable to political interference, and property rights are not strongly protected. Systemic corruption further undercuts the rule of law and hampers stable long-term economic development.
The government has taken steps to enhance regulatory efficiency and better integrate the economy into the global marketplace. The overall regulatory framework has gradually become more efficient and transparent, with procedures for business formation streamlined and the financial sector opened to competition. Thailand enjoys a relatively high level of trade freedom, although gains from trade continue to be undercut by non-tariff barriers.
Thailand has experienced 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 July 2011 parliamentary elections, Peua Thai, the opposition party and vehicle for 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.
A well-functioning legal framework is not firmly in place, and the judiciary continues to be 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. In the absence of effective enforcement measures, corruption has become deeply rooted in society.
The top income tax rate is 37 percent, and the top corporate tax rate is 23 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 14.5 percent of total domestic income. Government spending equals 23.3 percent of gross domestic output. The budget balance remains in deficit, and public debt is over 40 percent of GDP. Historic floods have led the government to implement a fiscal stimulus package.
Recent reforms have improved regulatory efficiency. With no minimum capital requirement, starting a business requires only four procedures. However, licensing requirements continue to be time-consuming. Labor regulations are relatively flexible, but informal labor activity remains substantial. Monetary stability has been maintained despite inflationary pressure. The government influences prices through subsidies and state-owned utilities.
The trade-weighted average tariff rate is moderate at 4.9 percent, but numerous non-tariff barriers add to the cost of trade. Although foreign direct investment is officially welcome, the government prohibits majority foreign ownership in many sectors. The overall investment regime lacks efficiency and transparency. The financial system has undergone restructuring in recent years. Capital markets are relatively well developed and dynamic.