OECD ECONOMIC SURVEY OF
THAILAND
Pursuing a strong and inclusive green recovery Bangkok 7 December 2023 oe.cd/thailand @OECDeconomy @OECD
Convergence with higher-income countries needs to resume OECD = 100 70
GDP per capita relative to the OECD average in 2017 PPP USD Thailand
Malaysia
Indonesia
Philippines
China
60 50 40 30 20
Note: Calculations based on output-side real GDP at chained PPPs. Source: Penn World Tables; and OECD calculations.
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
0
1970
10
The recovery has been slower than in peer economies Real GDP Index, 2019Q4 = 100
115 110 105 100 95 90 85 80
Source: CEIC.
Malaysia
Singapore
Indonesia
Thailand
Inbound tourism is recovering well Foreign visitors per month Million persons 4.5
Thailand
Singapore
Indonesia
Viet Nam
4 3.5 3 2.5 2 1.5 1 0.5 0 Jan-19 Source: CEIC.
Jan-20
Jan-21
Jan-22
Jan-23
Exports are recovering slowly Exports of goods Index, 2019Q4 = 100 200
Thailand
180 160 140 120 100 80 60
Source: CEIC; and OECD calculations.
Singapore
Indonesia
Malaysia
Tight monetary policy will be needed Contribution to consumer price inflation %, y-o-y 8
Food & beverage
Transport
2020
2021
Others
Headline
6 4 2 0 -2 -4
2019
Source: CEIC; Bureau of Trade and Economic Indices.
2022
2023
Core
Growth is projected to pick up 2022
2023
2024
2025
Real GDP growth (%)
2.6
2.7
3.6
3.2
Consumer price index (%)
6.1
1.6
2.2
2.0
Government budget balance (% of GDP)
-3.9
-3.9
-3.1
-2.9
Public debt (% of GDP)
60.5
62.1
62.5
62.6
Source: OECD calculations.
Strengthening public finances
Fiscal consolidation should continue General government budget balance % of GDP 0 -1 -2 -3 -4 -5 Fiscal balance -6
2016
2017
Primary balance 2018
2019
2020
Note: Data since 2023 are targets set under the Medium-Term Fiscal Framework. Source: Ministry of Finance; NESDC; and OECD calculations.
2021
2022
2023 (est.)
2024 (proj.)
Public debt needs to come down Gross public debt % of GDP 80 Debt ceiling
70 60 50 40 30 20 10 0
2016
2017
2018
Note: * denotes the latest data as of September 2023. Source: Ministry of Finance; NESDC.
2019
2020
2021
2022
2023*
Population ageing will increase spending pressures % 50 45
Old-age dependency ratio Population aged 65+ relative to 15-64 2000
2040
40 35 30 25 20 15 10 5 0
Philippines
Viet Nam
Indonesia
Thailand
China
Malaysia
OECD
Source: United Nations, Department of Economic and Social Affairs, Population Division (2022). World Population Prospects 2022, Online Edition.
Stronger revenues would improve debt sustainability Gross public debt % of GDP 100 90 80 70 60 50 40
Current debt ceiling
Baseline with ageing-related spending increase and no revenue increase Scenario with lower additional tax revenues Scenario with additional tax revenues Scenario with additional revenues and stronger growth
30 20 10 0
2022
2026
2030
2034
2038
2042
2046
2050
Note: The baseline scenario includes an ageing-related spending increase in social and health spending of 1 and 1.4 percentage points of GDP by 2035 and 2050, respectively, under the assumption of constant government spending per elderly person throughout the estimation periods. The baseline assumes that no additional revenue measures will be taken. The scenario with additional tax revenues assumes that primary balance will be maintained at -1% of GDP from 2035, financed through higher tax revenues. The additional tax revenues and high growth scenario assumes real GDP growth of 4% on top of the scenario with additional tax revenues. The scenario with lower additional tax revenues assumes that only half of these additional revenue measures will be implemented by 2035, implying a primary balance of -1.9% from 2035. Source: OECD calculations.
Higher and more progressive tax revenues are needed Tax revenue 2021 or latest year available
% of GDP 35 Taxes on personal income Taxes on corporate income 30 Social security contributions Taxes on property 25 Taxes on goods and services Other 20 15 10 5 0
Indonesia Malaysia Singapore Thailand Philippines
Source: OECD, Tax Revenue database; OECD calculations.
China
Korea
Japan
OECD
Enhancing social protection
Labour informality has declined Informal employment % of total employment Total (15+)
70
35-39
60 50 40 30 20 10 0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Note: Informal workers are those who are not protected or have no social security from work. Data cover only private sector workers. Source: National Statistics Office, Informal Employment Survey.
2020
2021
2022
Taxes and transfers could do more to reduce income inequality Gini index 2021 or latest year available After taxes and transfers
0.60
Before taxes and transfers
0.50 0.40 0.30 0.20 0.10 0.00
OECD
Korea
Japan
Thailand
Singapore
Philippines
Indonesia
Source: OECD, Income Distribution Database; F. Solt (2020), "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database", Social Science Quarterly 101(3):1183-1199, SWIID Version 9.4, November 2022.
Social security coverage should be broadened Social security contributors % of population aged 15-64, 2021 or latest available year 100 90 80 70 60 50 40 30 20 10 0
Source: OECD (2022), Pensions At a Glance Asia/Pacific 2022.
Public education spending should be raised Public education expenditures % of GDP 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: Government Fiscal Management Information System; World Bank World Development Indicators; and OECD calculations.
2022
Improving the business climate
Boosting productivity is a high priority Factors contributing to GDP growth % 10
Hours worked
Labour quality
Capital
TFP
GDP growth
8
% 10 8
6
6
4
4
2
2
0 -2
0
-4
-2
1990-1995
1995-2000
2000-2005
Note: TFP refers to total factor productivity. Source: Asian Productivity Organisation, APO Productivity database 2022.
2005-2010
2010-2015
2015-2020
Restrictions on foreign direct investment could be streamlined further OECD FDI Regulatory Restrictiveness index Scale from 0 (open) to 1 (closed), 2022 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0
Note: The OECD FDI Regulatory Restrictiveness Index covers only statutory measures discriminating against foreign investors (e.g. foreign equity limits, screening & approval procedures, restriction on key foreign personnel, and other operational measures). Other important aspects of an investment climate (e.g. the implementation of regulations and state monopolies, preferential treatment for export-oriented investors and special economic zones regimes among other) are not considered. See Kalinova et al. (2010) for further information on the methodology. Source: OECD FDI Regulatory Restrictiveness Index database, http://www.oecd.org/investment/fdiindex.htm.
Barriers to services trade could be reduced, especially in telecommunications Services Trade Restrictiveness Index in telecommunications Scale from 0 (open) to 1 (closed), 2022 0.8
Restrictions on foreign entry
0.8
0.7
Restrictions to movement of people
0.7
0.6
Other discriminatory measures
0.6
0.5
Barriers to competition
0.5
0.4
Regulatory transparency
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.0
0
OECD
Japan
Singapore
Korea
Source: OECD, Services Trade Restrictiveness Index database.
Thailand Malaysia Indonesia
China
Viet Nam
Achieving the green transition
Thailand has pledged net zero emissions by 2065 Greenhouse gas emissions by source and net CO2 emissions Mt CO2 equivalents per year 500 400 300 200 100 0 -100 -200 -300
Energy Waste Net CO2 emissions
Industrial processes Land use, land use change & forestry
Agriculture Net GHG emissions
2000 2005 2010 2015 2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065
Note: Data for 2000-2019 are from the Fourth National Communication, and those from 2020 are from the Long-term Low Greenhouse Gas Emission Development Strategy. Source: Ministry of Natural Resources and Environment, Fourth National Communication and Long-term Low Greenhouse Gas Emission Development Strategy.
Energy and transport emissions need to decline CO2 emissions from fuel combustion by sector, 2019 Transport other than road, 1% Others, 15%
Industry, 21%
Electricity and heat producers, 35%
Road transport, 28%
Source: IEA Greenhouse Gas Emissions from Energy.
Energy intensity and CO2 intensity have fallen CO2 emissions and contributions from different factors 2000-2019, % change 250
GDP
Energy intensity (Mtoe/USD 2015 PPP)
200 150 100 50 0 -50 -100
Source: World Bank World Development Indicators; OECD Green Growth Indicators.
CO2 intensity (CO2/TES)
CO2 emissions
Energy subsidies are small Energy subsidies, % of GDP Average 2015-2019
3.0
Oil
Coal
Natural gas
Electricity
2.5 2.0 1.5 1.0 0.5 0.0 -0.5
Philippines
Japan
Viet Nam
Korea
Thailand
Malaysia
Source: International Institute for Sustainable Development and OECD; FossilFuelSubsidyTracker.org.
China
Singapore Indonesia
An effective carbon pricing mechanism is needed ETS carbon prices USD/tCO2e 100
EU
90
Korea
New Zealand
Thailand
80 70 60 50 40 30 20 10 0
2016
2017
2018
2019
2020
2021
Source: World Bank Carbon Pricing Dashboard; Thailand Greenhouse Gas Management Organisation, Carbon Market information.
2022
Environmental regulations should be made more stringent Environmental Policy Stringency (EPS) Index, non-market based policies Scale from 0 (least stringent) to 6 (most stringent), 2020 6 5 4 3 2 1 0
Brazil
Indonesia
South Africa
Thailand
OECD minimum
India
OECD average
China
OECD maximum
Note: OECD minimum refers to the member country with the lowest index score, and OECD maximum refers to the member country with the highest index score. Source: OECD, OECD Environmental Policy Stringency Index; OECD calculations.
Renewable energy sources should expand further Electricity production by source Renewable energy sources other than hydro energy
% 12
Hydro
10 8 6 4 2 0
1997
1999
2001
2003
2005
Source: Ministry of Energy, Energy Statistics of Thailand.
2007
2009
2011
2013
2015
2017
2019
2021
The vehicle fleet is expanding rapidly Registered road motor vehicles Per thousand of population 1000
2021 or latest
900
2008
800 700 600 500 400 300 200 100 0
Viet Nam
Note: Motor vehicles include motorcycles. Source: ASEAN, ASEANStatDataPortal.
Philippines
Indonesia
Thailand
Malaysia
The electric vehicles market is still incipient Electric vehicles stock Per thousand of population, 2022 160 140
Cars
Vans
120 100 80 60 40 20 0
Note: Electric vehicles include battery electric vehicles and plug-in hybrid electric vehicles. For Thailand, vans are defined as microbuses, passenger vans, other vans and pick up cars. Cars are defied as vehicles under the Motor Vehicle Act, excluding vans and motorcycles. As of end 2022, there were 56 636 cars and 78 vans in Thailand. For the other countries, vans are defined as light commercial vehicles with gross vehicle weight below 3.5t. Source: IEA, Global EV Outlook 2023; World Bank, World Development Indicators; Department of Land Transport, Vehicle Registration Information.
More freight could travel by rail Inland freight transport by transportation mode as a share of total transport in %, 2019 100 90 80 70 60 50 40 30 20 10 0
Thailand
OECD average Road
Thailand
OECD average Rail
Thailand
OECD average
Waterways
Note: Calculations are based on tonne-kilometre data. The OECD average is calculated as an average of 26 members where data are available. Air and pipeline transport is not included. Source: ASEAN Railways, Data & Statistics; ITF Transport Statistics.
OECDEconomy OECD
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