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- GDP (PPP):
- $1.1 trillion
- 2.8% growth
- 2.9% 5-year compound annual growth
- $16,097 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s government has taken measures 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. The level of trade freedom is relatively high, although nontariff barriers continue to undercut gains from trade.
Despite relatively solid economic fundamentals, 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 government integrity has been undermined by pervasive corruption.
Thailand has had 19 military coups since becoming a constitutional monarchy in 1932. The period since the ouster and exile of Thaksin Shinawatra in 2006 has been particularly turbulent. Civilian government returned in 2007, and Pheu Thai, the legacy party of the Thaksin government, won an outright majority in the 2011 parliamentary elections. Thaksin’s sister, Yingluck Shinawatra, became prime minister but was subsequently ousted from power in spring 2014 in a military coup led by former army commander Prayut Chan-ocha, who is now prime minister. New elections, initially expected to be held in October 2015, have been postponed first until 2016 and again until 2017 following a referendum on a new constitution.
The independent judiciary has generally been effective in enforcing property and contractual rights but has been criticized for political bias. Owners of intellectual property rights must still contend with widespread counterfeiting and piracy. Corruption is widespread at all levels of society, and bribery is viewed as a normal part of doing business. Low civil service salaries also reportedly encourage officials to accept illegal inducements.
The top personal income tax rate is 35 percent, and the top corporate tax rate is 20 percent. Other taxes include a value-added tax and a property tax. The overall tax burden equals 16.5 percent of total domestic income. Government spending has amounted to 22.2 percent of total output (GDP) over the past three years, and budget deficits have averaged 0.1 percent of GDP. Public debt is equivalent to 43.1 percent of GDP.
Recent reforms have improved regulatory efficiency, although licensing requirements remain time-consuming. Labor regulations are relatively flexible, but informal labor activity remains substantial. The military government appears to have no intention of phasing out price controls on an extensive list of goods and services, including basic foods, cooking oils, and fertilizer, that have been in place for many years.
Trade is extremely important to Thailand’s economy; the value of exports and imports taken together equals 132 percent of GDP. The average applied tariff rate is 3.6 percent. The government has undertaken measures to facilitate trade, but investment in several sectors of the economy is restricted. The financial system has undergone restructuring, and the regulatory framework has been strengthened. The stock exchange is active and open to foreign investors.