OECD Economic Surveys: Thailand 2023
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Thailand has achieved remarkable economic progress over the past decades. A strong and timely policy response helped to cushion the economic and social impact of the pandemic, and of high energy and food prices. While bold fiscal support prevented the economy from falling into a recession, public debt has risen and fiscal consolidation should now continue at a gradual pace. Rising social demands, population ageing and the green transition will likely add to public spending pressures and call for raising additional tax revenues. Boosting productivity and mastering the transition towards more sustainable and inclusive growth will require stepping up delayed structural reforms. Competition remains limited across several sectors, likely related to market entry barriers and high regulatory burdens. More than half of workers lack formal employment and social security does not cover most of them. Social pensions provide a minimum income floor for elderly people, and raising them could allow significant inroads in the fight against poverty and inequality. Meeting climate pledges will require bold and well-organised reforms. Renewable power generation has advanced, but the overall share of renewable energy sources remains lower than in peer countries.
SPECIAL FEATURES: BOOSTING PRODUCTIVITY; INCLUSIVE RECOVERY; GREEN GROWTH
Pursuing a strong and inclusive green recovery
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.
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