Bangkok: The World Bank is expressing concern over Thailand's GDP growth, which is expected to slow to 1.6 percent in 2026.
According to Thai News Agency, the anticipated slowdown is attributed to a decline in global trade, rising household debt, and a lukewarm recovery in the tourism sector. The forecast suggests a modest improvement with a growth rate of 2.2 percent in 2027. The World Bank recommends that Thailand should focus on accelerating the development of future industries and advanced manufacturing to bolster economic growth.
The World Bank's report, titled "Advanced Green Manufacturing to Drive Growth," highlights that foreign direct investment (FDI) is starting to take shape. However, the manufacturing sector remains a critical component of the Thai economy, contributing to 25 percent of GDP and providing employment for 6.2 million people, which constitutes 16 percent of the workforce. The report underscores the importance of boosting the share of environmentally friendly Thai exports, which currently represent 10 percent of the total export value, in order to drive growth and enhance economic resilience.
The report advocates for the expansion into high-value, low-carbon industries, such as electric vehicles, solar energy equipment, and energy-efficient electrical appliances. These sectors are projected to increase productivity, create jobs, and help Thailand adapt to shifting global demand patterns. Dr. Kiatipong Ariyaprajya, Senior Economist for Thailand at the World Bank, noted that environmentally friendly advanced manufacturing industries could potentially increase GDP by an additional 2.9 percent by 2035. This presents a significant opportunity for the Thai government to emphasize higher value-added production by promoting competitiveness, enhancing workforce skills, and rebalancing fiscal policy.
Dr. Ariyaprajya further emphasized the need to foster competition in the service sector and infrastructure to boost productivity, particularly in areas like electric vehicles, advanced electronics, and green manufacturing. The report also stresses the importance of a gradual fiscal recovery to support these initiatives, which are vital for the long-term growth and sustainability of Thailand's economy.