Key conclusions
Part A: Recent developments and economic perspectives
- The economy should gain momentum in 2025, driven by stronger domestic demand and budget recovery measures. Growth should accelerate to 2.9% in 2025, compared to 2.6% in 2024.
- Tourism and private consumption will continue to be key motors in growth, although a slower pace.
- Tourism should return to pre-pale levels by mid-2010, the number of tourists is expected to increase to 40 million, compared to 35.3 million in 2024.
- Private consumption will benefit from budgetary stimulation measures, in particular the digital cash transfer program of the portfolio. Preliminary estimates suggest that cash transfers increased GDP growth by 0.3 percentage points in 2024. However, this has a high budgetary cost of 145 billion THB or 0.8% of GDP.
- Poverty would have dropped to 8.2% in 2024, underpinned by the current economic recovery and cash transfer program. In addition, inequalities would have decreased by about 1.5 Gini points.
- Inflation is planned at 0.8% in 2025, still below the target of the central bank.
- Exports of goods should moderate slightly due to softer growth on the main markets such as the United States and China, despite the global electronic upcycle.
- For Thailand to increase budgetary resilience in the middle of the increase in expenditure needs, it would be important to focus on targeted social assistance, improve the mobilization of tax revenue and accelerate public investments in infrastructure, technology and human capital to stimulate the growth of the private sector.
- A prudently accommodating monetary position is essential to support the recovery, emphasizing the reduction of the debt of targeted households while maintaining financial stability.
- Structural reforms of economic competitiveness are necessary to stimulate long -term growth. Without urgent policies reforms, the potential growth of Thailand should go from an average of 3.2% in 2011-21 to 2.7% in 2022-30, which hinders its high income aspirations.
Part B: Innovation in a changing world – empower SMEs and startups
- Thailand has made significant social and economic progress over the past five decades. However, to reach higher income levels and standard of living, the increase in private sector productivity, especially among SMEs, is essential. The adoption and innovation of technology will be essential to remain competitive in a rapid regional and global economy.
- Thailand faces several risks if it cannot innovate. It may be delayed as regional peers accelerate their innovation efforts. Companies must also adopt sustainable production practices or exclusion from the risks of global value chains. Urgent challenges such as aging demography, health care and logistics will also require innovative solutions.
- SMEs can be a major asset in the economic growth of reinforcement in Thailand. They represent 99.5% of companies in Thailand, 69.5% of national employment and 35.3% of global GDP. However, their low innovation and their participation limited in global value chains highlight an unexploited potential.
- SMEs and entrepreneurs in Thailand face four main challenges: limited access to financing, lack of support for infrastructure at an early stage (incubators and accelerators), inadequate skills for the future and regulatory obstacles, in particular linked to equitable competition and trade and investment. These constraints partly explain the relatively low number of entrepreneurs trying to enter the markets, in particular in the digital sector, which is crucial for productivity and innovation.
- Thailand has a story to overcome challenges and is well placed to stimulate innovation. By addressing obstacles to research and development, financing, skills development and improving competition and market access, the country can strengthen its position as a regional leader in innovation. The coordinated efforts between the sectors will be essential to ensure the alignment and effectiveness of innovation policies.