The Dive

The Economy of Thailand - Industry & Market Trends in 2023

Last Updated: May 2, 2023


What is The Overall Outlook in Thailand?

Thailand is the second largest economy in Southeast Asia and a member of the ASEAN. Its economy, worth over $500 billion, is larger than that of Hong Kong and only second to Indonesia among ASEAN countries due to its large population.

Tourism is the primary growth driver of Thailand’s economy, accounting for 6.3% of its total GDP in 2019 before the pandemic. From 2012 to 2019, the tourism industry grew at an average rate of 9.6%, reaching 696 billion baht.

However, the global pandemic in 2020 caused a significant economic loss in Thailand, resulting in a 6.3% decline in its total GDP. Despite a slight increase of 1.6% in 2021, the economy has not fully recovered due to the surge in domestic cases. Additionally, China’s zero-clearing policy has also impacted Thailand’s tourism industry, making it unlikely to return to pre-pandemic levels until late 2023 to 2024.

In the next few years, Thailand’s economy will be driven by two main pillars: tourism and industrial manufacturing and advanced technology. Despite being impacted by the pandemic and China’s zero-clearing policy, tourism is still a major contributor to Thailand’s economy. The Thai government has introduced policies to attract wealthy foreign visitors and increase their stay, such as providing 10-year financial aid and a resident VISA for those with assets or income above a certain threshold.

Industrial manufacturing and advanced technology will also play a key role in Thailand’s growth, driven by the country’s 4.0 policy. This policy aims to attract investment from leading companies in advanced markets through tax cuts and subsidies in ten major industries, including smart electronics, high-end tourism and medical care, high-value agriculture, and digital services. This will increase the proportion of Thailand’s FDI during 2022-2030 and drive growth in both the industry and its corresponding supply ecosystem.

Table of Contents
Real GDP Growth(%)|Data After 2023 is forecasted by IMF
GDP Per Capita (Current $)|Data After 2023 is forecasted by IMF

Economic Structure

Thailand - Economic Structure & Forecast

GDP Data is updated in January, 2023. Figures below represent GDP contribution with the expenditure approach by segment. Data is sourced from World Bank, IMF, and local government and refactored by our team. Forecasted data is from EIU.

Private Consumption
Government Expenditure
Capital Formation
Net Export

Economy Outlook

Economic Snapshot of Thailand

In the past five years, the main drivers of Thailand’s economy have been private consumption and government spending. The proportion of private consumption in total GDP increased from 48.9% in 2017 to 52.1% in 2021, while government spending grew from 16.3% to 18.2% over the same period. In contrast to consumption, Thailand’s fixed investment proportion remained roughly the same, between 22.5% and 23.5%, while exports declined and imports increased over the same period.

Going forward, the main driver of Thailand’s economy is expected to come from increased investment, especially from advanced market FDI, focused on the development of Thailand 4.0 and the corresponding Eastern Economic Corridor policy. This will attract investment from advanced manufacturers and related technology companies. At the same time, Thailand’s infrastructure upgrading plans have also created significant investment opportunities, including in communication technology (5G, private 5G, IoT applications) and energy infrastructure.

Unemployment Rate(%)|Forecasted data for after 2023
Inflation Rate(%)|Forecasted data for after 2023

Industry Structure

Thailand - Industry Breakdown & Forecast

GDP Data is updated in January, 2023. Figures below represent GDP contribution with the expenditure approach by segment. Data is sourced from World Bank, IMF, and local government and refactored by our team. Forecasted data is from EIU.

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Demographic Outlook

Demographic Outlook in Thailand

With a population of around 70 million in 2023, Thailand is the fourth largest country in terms of population among the ASEAN nations. Despite this, its economy ranks second due to its comparatively high per capita GDP.

Yet, its economic status has slowly been caught up by its neighbors though. One of the most detrimental factors contributing to this trend is its demographic characteristics. Most policy making are also centered around this aspect.

As the fertility rate remain low at about 1.4 and the population kept aging, Thailand has gradually shifted to an aging society. In 2021, It’s population that are 65 years old and beyond is even comparable to that of South Korea at 14.5% and 16.7 respectively, according to an estimate by the UN. The income per head is yet 5 times smaller than that of South Korea.

This is resemblance to the middle income trap some countries are familiar of. However in the case of Thailand, it’s even more destructive and potentially looming a population crisis. The population is still growing though, it is not expected to shrink until the year 2028 to 2030. However, the structure of the demographic is already looking strained with more labor force (16-64) moving to 65 years and beyond. Labor force as a percentage shrink from 69.7% in 2021 to 67.8% in 2025.

Immigration could be a solution to this puzzle. It is also been found that immigration provide substantial value to Thai’s economy, contributing about 7.6% of the workforce and 4.3 – 6.6% of the GDP (2010 est.). Attitude toward immigrant workers are however generally negative citing to a survey done by the the ILO (International Labor Org.).  According to the survey, 72% of survey respondent expressed that migrants commit a high number of crimes; 53% of the Thais surveyed said the country does not need low-skilled migrant workers.

This is also the reasons that net migration has been decreasing over the years, despite Thailand being an attractive destination. It would require substantial shift of public’s attitude as well as strong policy making in the this decade to further push the immigration agenda to alleviate the demographic burden.

Interestingly, during the coming decade, the number of households in Thailand is expected to increase significantly, leading to a reduction in the average household size, despite a slow population growth. In 1980, the mean family size was 5.2 persons, this fell to 4.4 in 1990, to 3.1 in 2010, and was last recorded at 3 in 2022 (Population and Housing Census, 2020).

This shift is driven by changing social patterns and internal migration, with nuclear families becoming more prevalent and extended families less common. Urbanization is also continuing to be a major demographic trend, with cities like Surat Thani, Chiang Mai, and Hat Yai experiencing rapid growth alongside Bangkok, the primary focus for urban populations. While the percentage of rural populations has decreased over time, it still stands at nearly 50% in 2020, which is high for middle-income countries according to the World Bank. This suggests that even after the disruption of Covid-19, metropolitan areas will continue to expand and urbanization will persist.

Racial Profile

Thai 97.5%, Burmese 1.3%, other 1.1%, unspecified <.1% (2015 est. by CIA)

Languages Used

Thai (official) only 90.7%, Thai and other languages 6.4%, only other languages 2.9% (includes Malay, Burmese)

Religions Practiced

Buddhist 94.6%, Muslim 4.3%, Christian 1%, other <0.1%, none <0.1% (2015 est. by CIA)

Population Structure

Thailand - Population Pyramid

Political Outlook

Political Outlook & Policy Trends in Thailand

With the occurrence of the Siamese Revolution of 1932, Thailand successfully ended 800 years of monarchy rule and opened up a constitutional monarchy era. The military and civilians who led the revolution also established the first people-led political party (Thai People’s Party). However, the party quickly fell apart due to political and interest conflicts. The political environment and democracy in Thailand have continuously experienced political turbulence since its founding and have experienced 19 coups so far.

The most recent one took place in 2014 when the elected Prime Minister, Yingluck Shinawatra, was declared ineligible by the Constitutional Court controlled by the military due to unconstitutional conduct. The military government continued to rule Thailand until 2019, until the former leader of the peace and order committee, Prayut Chan-o-cha, won the support of the military-backed party in the 2019 parliamentary election and was appointed as Prime Minister by the Senate. He then announced the end of the military government.

Although Thailand’s current political environment has returned to the so-called democratic system and process, its systematic design still allows the military to have a significant influence on politics. The For Thai Party, led by the former Prime Minister Thaksin Shinawatra, who was ousted in the 2006 coup, although they won a majority in the House of Representatives in this election and the pro-democracy Future Forward Party also won a high number of seats, the Senate’s 250 seats were all appointed by the military, making constitutional amendment unrealistic for the next decade or so.

In the current international and Thai economic, population, and political situation, Thailand’s policies will focus on several key areas. The most important is based on the intensifying regional competition, Thailand is promoting its development to improve its infrastructure and business, with the Thai 4.0 policy being the most indicative. The Eastern Economic Corridor (EEC) development plan in the policy focuses on airport, port, logistics infrastructure, and communication infrastructure, among others.

Thai House of Representatives 2019 Election
Note: No Left–Right Categorization
Current Account Balance (% of GDP)|Forecasted data for after 2023
Government Debt (% of GDP)|Forecasted data for after 2023

Foreign Policy

Trade & Foreign Investment In Thailand

Export (Million Dollars | Nominal)
Export - Percentage of World (‱)
Foreign Direct Investment (Million Dollars | Nominal)
FDI - Percentage of World (‱)

Consumer Outlook

Thailand - Consumer & Market Outlook

We work with 3rd party data offices and our experts network to deliver the most comprehensive retail & consumer behavior landscape there is.

E-Commerce Development, Penetration, Trends & Outlook in Thailand

Social Media Development, User Demographics, Platforms, and Trends in Thailand

  • Economic Data:OECD, World Bank, IMF、Government Statistics Bureau
  • Currency Exchange:Based on IMF data in 2023/1
  • GDP Growth Projection:OECD、IMF, OECD, EIU、Government Bureau
  • Demographics:UN Population Database
  • Race, Culture, and Languages:CIA Factbook
  • Unemployment Rate Projection:ILO, UNECE
  • Trade:UN Comtrade, UNCTD
  • ICT Infrastructure:ITU
  • Data Calculation &
  • Analysis:OOSGA Analytics
Author: Economic Team, FR Team

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