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Key Findings
Part A: Recent Developments and Economic Outlook
- The economy is set to gain momentum in 2025, driven by stronger domestic demand and fiscal stimulus measures. Growth is projected to accelerate to 2.9 percent in 2025 up from 2.6 percent in 2024.
- Tourism and private consumption will continue to be key drivers of growth, although at a slower pace.
- Tourism is projected to return to pre-pandemic levels by mid-2025 with the number of tourists expected to surge to 40 million from 35.3 million in 2024.
- Private consumption will benefit from fiscal stimulus measures, particularly the Digital Wallet cash transfer program. Preliminary estimates suggest that the cash transfers raised GDP growth by 0.3 percentage points in 2024. However, this comes at a high fiscal cost of THB 145 billion or 0.8 percent of GDP.
- Poverty is estimated to have declined to 8.2% in 2024, underpinned by the ongoing economic recovery and cash transfer program. Additionally, inequality is estimated to have declined by about 1.5 Gini points.
- Inflation is forecasted at 0.8% in 2025, still below the central bank’s target.
- Goods exports are expected to moderate slightly due to softer growth in major markets such as the United States and China, despite the global electronics upcycle.
- For Thailand to raise fiscal resilience amid rising spending needs it would be important to focus on targeted social assistance, enhance tax revenue mobilization, and accelerate public investments in infrastructure, technology, and human capital to stimulate private sector growth.
- A cautiously accommodative monetary stance is essential to support recovery, with a focus on providing targeted household debt relief while maintaining financial stability.
- Structural reforms on economic competitiveness are necessary to boost long-term growth. Without urgent policy reforms, Thailand's potential growth is projected to decrease from an average of 3.2% in 2011-21 to 2.7% in 2022-30, hindering its high-income aspirations.
Part B: Innovation in a Changing World – Empowering SMEs and Startups
- Thailand has made significant social and economic progress over the past five decades. However, to achieve higher income levels and living standards, increasing private-sector productivity—especially among SMEs—is critical. Technology adoption and innovation will be key to remaining competitive in a rapidly evolving regional and global economy.
- Thailand faces several risks if it fails to innovate. It risks falling behind as regional peers accelerate their innovation efforts. Firms must also adopt sustainable production practices or risk exclusion from global value chains. Pressing challenges such as aging demographics, healthcare, and logistics will also require innovative solutions.
- SMEs can be a major asset in reigniting economic growth in Thailand. They account for 99.5 percent of firms in Thailand, 69.5 percent of national employment, and 35.3 percent of overall GDP. However, their low innovation and limited participation in global value chains highlight untapped potential.
- SMEs and entrepreneurs in Thailand face four main challenges: limited access to financing, lack of support to early-stage infrastructure (incubators and accelerators), inadequate skills for the future, and regulatory barriers, especially related to fair competition and trade and investment. These constraints in part explain the relatively low number of entrepreneurs trying to break into markets, especially in the digital sector, which is crucial for productivity and innovation.
- Thailand has a history of overcoming challenges and is well-positioned to drive innovation. By addressing barriers to research and development, financing, skills development, and enhancing competition and market access, the country can strengthen its position as a regional innovation leader. Coordinated efforts across sectors will be essential to ensure alignment and efficiency in innovation policies.