2017 Index of Economic Freedom

Thailand

overall score66.2
world rank55
Rule of Law

Property Rights51.3

Government Integrity40.7

Judicial Effectiveness41.7

Government Size

Government Spending85.3

Tax Burden81.0

Fiscal Health96.3

Regulatory Efficiency

Business Freedom69.9

Labor Freedom62.8

Monetary Freedom72.9

Open Markets

Trade Freedom82.8

Investment Freedom50.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 68.8 million
  • GDP (PPP):
    • $1.1 trillion
    • 2.8% growth
    • 2.9% 5-year compound annual growth
    • $16,097 per capita
  • Unemployment:
    • 1.1%
  • Inflation (CPI):
    • -0.9%
  • FDI Inflow:
    • $10.8 billion
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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.

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Background

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.

Rule of LawView Methodology

Property Rights 51.3 Create a Graph using this measurement

Government Integrity 40.7 Create a Graph using this measurement

Judicial Effectiveness 41.7 Create a Graph using this measurement

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.

Government SizeView Methodology

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.

Regulatory EfficiencyView Methodology

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.

Open MarketsView Methodology

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.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong89.81.2
2Singapore88.60.8
3New Zealand83.72.1
4Australia810.7
5Taiwan76.51.8
6South Korea74.32.6
7Malaysia 73.82.3
8Macau70.70.6
9Brunei Darussalam69.82.5
10Japan69.6-3.5
11Kazakhstan695.4
12Vanuatu67.46.6
13Thailand 66.22.3
14Philippines65.62.5
15Azerbaijan63.63.4
16Fiji63.44.6
17Tonga633.4
18Indonesia61.92.5
19Kyrgyz Republic 61.11.5
20Cambodia59.51.6
21Bhutan58.4-1.1
22Samoa58.4-5.1
23Tajikistan58.26.9
24China57.45.4
25Sri Lanka57.4-2.5
26Nepal55.14.2
27Solomon Islands558.0
28Bangladesh 551.7
29Mongolia54.8-4.6
30Micronesia54.12.3
31Laos544.2
32Pakistan 52.8-3.1
33India52.6-3.6
34Burma52.53.8
35Vietnam52.4-1.6
36Uzbekistan52.36.3
37Papua New Guinea50.9-2.3
38Kiribati50.94.7
39Maldives50.3-3.6
40Afghanistan48.9N/A
41Turkmenistan47.45.5
42Timor-Leste46.30.5
43North Korea4.92.6
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