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- GDP (PPP):
- $1.2 trillion
- 2.8% growth
- 3.4% 5-year compound annual growth
- $16,888 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s economic freedom score is 67.1, making its economy the 53rd freest in the 2018 Index. Its overall score has increased by 0.9 point, with improvements in business freedom and investment freedom outweighing lower scores for the government integrity and property rights indicators. Thailand is ranked 12th among 43 countries in the Asia–Pacific region, and its overall score is above the regional and world averages.
To enhance its free-enterprise system and generally pro-investment policies, the government has gradually made Thailand’s regulatory framework more efficient and transparent to better integrate the economy into the global marketplace. Business-formation procedures have been 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. Political instability continues to undermine the investment climate, and the judicial system remains vulnerable to political interference. Government integrity is undermined by pervasive corruption.
Thailand has had 19 military coups since becoming a constitutional monarchy in 1932. The period since the ouster of Prime Minister Thaksin Shinawatra in 2006 has been particularly turbulent. Civilian government returned in 2007, and Thaksin’s Puea Thai party won a majority in 2011 parliamentary elections. Thaksin’s sister, Yingluck Shinawatra, became prime minister but was later ousted in a 2014 coup led by former army commander and current Prime Minister Prayut Chan-ocha. The king approved a new constitution in 2017. Elections, postponed three times, are scheduled for 2018. Thailand’s free-enterprise economy benefits from a relatively well-developed infrastructure. Exports of electronics, agricultural commodities, automobiles and parts, processed foods, and other goods account for about two-thirds of GDP.
Property and contractual rights are protected and enforced by the independent judiciary, but the legal process is slow, and widespread counterfeiting and piracy continue to undermine intellectual property rights. Corruption is widespread at all levels of society, and bribery is viewed as a normal part of doing business. Low civil service salaries reportedly encourage officials to accept bribes.
The top personal income tax rate is 35 percent, and the top corporate tax rate is 20 percent. Other taxes include value-added and property taxes. The overall tax burden equals 15.7 percent of total domestic income. Over the past three years, government spending has amounted to 22.0 percent of total output (GDP), and budget deficits have averaged 0.1 percent of GDP. Public debt is equivalent to 42.2 percent of GDP.
Starting a business and resolving insolvency were made easier in 2016. Since 2013, as Thailand has transformed to a higher productivity manufacturing and service-oriented economy, the share of the labor force in the informal sector has declined by about 6 percentage points. The military government maintains price controls on basic foods, cooking oils, and fertilizer. In 2016, it also announced new rice subsidies.
Trade is extremely important to Thailand’s economy; the combined value of exports and imports equals 123 percent of GDP. The average applied tariff rate is 3.5 percent. Nontariff barriers impede some trade. Government openness to foreign investment is below average. The financial system, a mix of domestic banks, foreign lenders, and state-owned specialized financial institutions, remains relatively resilient and sound.