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Thailand has achieved remarkable economic and social progress over the past decades, followed by several years of more moderate growth prior to the pandemic. After a severe downturn, the recovery picked up rapidly, buoyed by a strong rebound of inbound tourism. Nonetheless, making the on-going recovery more solid and inclusive will require bold reforms. Strong fiscal support helped to avoid a sharp economic contraction, but public debt has increased rapidly over the past years, calling for a credible fiscal consolidation plan. The recovery of foreign investment is falling behind regional peers, but improvements in structural policies have the potential to reinvigorate strong investment. The labour market is recovering well, but young people have not fully benefited from this recovery. Reducing labour informality is the longstanding challenge. Against this background, this chapter discusses how macroeconomic and structural policies can help Thailand to return to a robust recovery path and how social policies can make the recovery more inclusive.
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Thailand’s current pledge to achieve carbon neutrality by 2050 and net zero emissions by 2065 will require dramatic policy changes. Given that the economy is in a process of catching up with advanced economies, particular emphasis will need to be placed on making the green transition conducive to economic growth and further improvements in living standards, which requires bold and ‑well-designed reforms. Thailand has already started these efforts. Biofuels are being widely used for road transport, and the role of other renewable energy sources has also been increasing. Investments into greener production technologies and a more responsible use of resources have received strong attention. However, most current initiatives are voluntary, which will not be sufficient to achieve the country’s climate goals. Against this background, this chapter discusses Thailand’s green growth policy framework with a focus on the right policy mix and institutional setup.