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Thailand’s economy is the 9th largest in Asia and the second-largest economy in Southeast Asia (SEA). Over the last four decades, the country has made remarkable progress in its socio-economic development, transitioning from a low-income to an upper-middle-income nation within a single generation. This transformation has earned Thailand recognition as a development success story, with sustained economic growth and significant poverty reduction.
The country has a population of about 71 million and a labour force exceeding 40 million. Despite a per capita gross domestic product (GDP) of around $7,300 in 2023, Thailand has achieved a dramatic reduction in poverty, from 58% in 1990 to 6.3% in 2023, according to the latest data. The unemployment rate, traditionally low in Thailand, rose to 2.25% in 2021 during the pandemic but fell again to 1.32% in 2022 and 0.98% in 2023. These levels remain close to the country’s long-term average of 1.20%.
Thailand’s low unemployment rate can be attributed to factors such as a low birth rate, minimal social insurance coverage, and the high proportion of workers in the informal sector.
Thailand economy: Unemployment Rate (in %)
Thailand’s GDP grew at an average rate of 9.5% annually during its economic boom from 1987 to 1996. However, growth slowed to 3.9% on average between 2000 and 2014. The Covid-19 pandemic dealt a significant blow to Thailand’s economy, leading to a 6.2% contraction in 2020, the sharpest decline in decades.
To recover from the pandemic-induced downturn, the government introduced various stimulus measures. With the easing of restrictions and the reopening of the economy, GDP growth resumed, reaching 1.6% in 2021, 2.6% in 2022, and 1.9% in 2023.
Looking ahead, the International Monetary Fund (IMF) projects Thailand’s GDP to grow by 2.8% in 2024 and 3.0% in 2025, as the country continues its recovery trajectory.
Thailand GDP Annual Growth Rate (in %)
Currency and Central Bank
The Thai baht (THB) is Thailand’s official currency, subdivided into 100 satangs. In 2018, the baht was recognized as one of the world’s best-performing currencies, reflecting its strength and stability during that period.
The Bank of Thailand (BOT) serves as the nation’s central bank, currently led by Governor Sethaput Suthiwartnarueput. The BOT’s mission is to enhance the standard of living for the country’s citizens by ensuring a stable financial environment conducive to sustainable economic growth.
Inflation in Thailand peaked at 6.1% in 2022 but decreased to 1.2% in 2023. For 2024, the BOT forecasts headline inflation at 0.5%, with core inflation also at 0.5%, and for 2025 1.2% and 0.9%, respectively.
Thailand Inflation (in %)
Industry and Trade
Thailand’s economy can be structured into three primary sectors: agriculture, industry, and services.
Looking at the agriculture sector, Thailand is a leading global producer of natural rubber and ranks among the top rice producers and exporters. In 2023, the agricultural sector employed approximately 31% of the nation’s workforce but contributed only 8.8% to the gross domestic product (GDP). This disparity highlights the sector’s declining share in the economy, influenced by the expansion of goods and services exports.
The industrial sector accounted for about 35% of Thailand’s GDP in 2023, employing about 22.50% of the total workforce. Key industries include electronics, steel, and automotive manufacturing. Thailand serves as a significant assembly hub for international car brands and produces electrical components, appliances, computers, cement, furniture, and plastic products.
The service sector comprises approximately 60% of the GDP. Tourism, a vital component of this sector, experienced a substantial downturn due to the Covid-19 pandemic. In 2019, Thailand welcomed around 40 million foreign tourists, contributing to 11% of GDP and providing 20% of total employment. Chinese tourists accounted for 30% of all tourism spending that year. However, the pandemic led to a sharp decline, with only about 430,000 tourists in 2021, down from 6.7 million in 2020.
The gradual reopening of borders resulted in a surge of international arrivals, reaching 11.15 million in 2022. By the end of 2023, Thailand welcomed over 28 million foreign tourists, generating more than 1.2 tn baht in revenue.
Thailand Balance of Trade
Thailand has a robust export sector with key exports including office machine parts, integrated circuits, automobiles, delivery trucks, and motor vehicle parts and accessories. Major imports consist of crude petroleum, integrated circuits, gold, petroleum gas, and motor vehicles.
The country’s top export partners are the United States, China, Japan, Vietnam, and Australia. The leading import partners are China, Japan, Malaysia, the United States, and the United Arab Emirates.
Stock Exchanges and Capital Markets
The Stock Exchange of Thailand or SET is the sole stock exchange in the country. In terms of market capitalization within the Association of Southeast Asian Nations (ASEAN), the SET ranks third with $559.22 bn, following the Indonesia Stock Exchange (IDX, $881.47 bn) and the Singapore Exchange (SGX, $609.65 bn).
Thailand’s IPO market is one of the strongest in Asia. According to Deloitte, with only 29 listings in 2024 but $756 mn raised, Thailand represents 26% of Southeast Asia’s total IPO activity, placing the country among the top three markets.
“In 2024, Thailand’s stock market landscape and IPO listings reflect a combination of economic recovery and moderate growth. As companies seek to capitalise on post-pandemic growth, many have demonstrated resilience and future-readiness with the development of business strategies and operations which have adopted Generative AI and robotics,” said Wilasinee Krishnamra, Transactions Accounting Support Partner, Deloitte Thailand. “The regulator has also introduced initiatives to enhance market transparency and support new and growing businesses, including SMEs, further stimulating fundraising activities.”
The SET50 and SET100 are the most prominent stock indices. The SET50 Index comprises the top 50 companies listed on the SET, selected based on criteria such as large market capitalization, high liquidity, and compliance with requirements regarding the distribution of shares to minor shareholders. The SET100 Index is a broader index that includes the top 100 listed companies, encompassing all constituents of the SET50 Index and an additional 50 companies meeting similar selection criteria.
Notable Thai companies are PTT Public Company Limited (oil and gas), Siam Cement Public Company Limited (building materials) and Airports of Thailand Public Company Limited (operator of the country’s main airports).
Bond Market
Thailand’s bond market has experienced significant growth over the past few decades. In 1997, the market’s size was approximately 12% of the GDP. By September 2023, it had expanded to about 105% of GDP, reflecting its increasing importance in the nation’s financial system.
The market is divided into government and corporate debt securities. Government debt securities, which make up around 50% of the total market, include Treasury Bills (T-bills), government bonds, Bank of Thailand (BoT) bonds, and State-Owned Enterprise (SOE) bonds. Corporate debt securities account for approximately 29% of the market and include various instruments such as straight bonds, floating rate notes (FRNs), amortizing bonds, and convertible bonds.
As of November 2024, Thailand’s bond market continues to exhibit robust growth and significant foreign investment activity. The total outstanding value of the Thai bond market reached 16.9 tn baht (approx. $500 bn) at the end of the first quarter of 2024, marking a 2.8% quarter-on-quarter increase.
Real Estate Market
Thailand’s real estate market has undergone significant changes in recent years, influenced by economic factors and shifting consumer preferences.
Between 2019 and 2020, Thailand experienced a decline in house prices due to a sluggish economy, high household debt, and reduced consumer purchasing power exacerbated by the Covid-19 pandemic. This downturn led developers to delay new projects, focusing instead on selling existing inventory and offering discounts.
In 2022, developers increased the number of new projects compared to 2021, signaling a rebound in market confidence. By 2023, the local housing market saw remarkable growth. In Bangkok, real estate prices rose by approximately 10%, while Phuket experienced a 5% increase.
Anticipated to exhibit a compound annual growth rate (CAGR) of 1.26% between 2023 and 2028, Thailand’s real estate market volume is expected to reach $2.63 tn by the end of this period.
Thailand Housing Index (in %)
Editorial Note:
This article was written with the assistance of AI. A human editor reviewed and refined the text for accuracy and quality before publication.
Source of charts: tradingeconomics.com
