- GDP (PPP):
- $1.3 trillion
- 4.1% growth
- 3.1% 5-year compound annual growth
- $19,476 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s economic freedom score is 69.4, making its economy the 43rd freest in the 2020 Index. Its overall score has increased by 1.1 points due to higher scores for government integrity and property rights. Thailand is ranked 11th among 42 countries in the Asia–Pacific region, and its overall score is well above the regional and world averages.
The Thai economy has been moderately free for two decades. GDP growth has been solid, although it could decelerate in 2020 because of slower domestic and foreign demand.
Thailand has made remarkable progress in expanding economic freedom, moving from a low-income to an upper-income country in less than a generation. The new military-backed government continues to prioritize economic revival and an improved investment climate. Until it confronts its own sorry record of deep corruption, however, which is reflected in weak performance on the judicial effectiveness and government integrity Index indicators, further progress toward greater economic freedom will be impeded.
Thailand has had 19 military coups since becoming a constitutional monarchy in 1932. The period since 2006 has been particularly turbulent and ultimately resulted in a 2014 coup led by former army commander and current Prime Minister Prayut Chan-ocha. National legislative elections held in March 2019 solidified the power of the junta-aligned Phalang Pracharat party and will likely result in ongoing military influence and policy continuity. After the death of long-ruling and much-loved King Bhumibol Adulyadej, his son, King Maha Vijiralongkorn, was crowned in May 2019. Thailand’s free-enterprise economy benefits from 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 rights are guaranteed by law. Secured interests in property are recognized and enforced. The new constitution grants independence to the judiciary, but Thailand’s courts are politicized, and corruption is common in the judicial branch. Although it overthrew the previous government because of corruption, the current regime has engaged in corruption, cronyism, and nepotism. Corrupt high-level officials have acted with impunity.
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 17.6 percent of total domestic income. Government spending has amounted to 21.7 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 0.2 percent of GDP. Public debt is equivalent to 42.1 percent of GDP.
Pro-business reforms in 2018 have made it easier to start a business, get electricity, pay taxes, and trade across borders. Low fertility, an aging population, and a skills mismatch worsen labor shortages. About 55 percent of the labor force earns income informally. The government has eliminated price controls on sugar but uses subsidies to offset fluctuating oil prices and heavily subsidizes the politically sensitive rice industry.
The total value of exports and imports of goods and services equals 123.3 percent of GDP. The average applied tariff rate is 3.5 percent, and 244 nontariff measures are in force. Foreign investment is subject to government screening, and investment in several sectors is limited. The financial sector, dominated by banks, is relatively resilient and diversified, but the private debt market remains underdeveloped.