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- GDP (PPP):
- $673.7 billion
- 2.9% growth
- 2.9% 5-year compound annual growth
- $9,875 per capita
- Inflation (CPI):
- FDI Inflow:
Thailand’s economic freedom score is 62.4, making its economy the 75th freest in the 2015 Index. Its score has decreased by 0.9 point since last year, with deteriorations in financial freedom, property rights, and the control of government spending outweighing small improvements in six of the 10 economic freedoms, including labor freedom, fiscal freedom, and freedom from corruption. Thailand is ranked 12th out of 42 countries in the Asia–Pacific region, and its overall score is higher than the world and regional averages.
Thailand’s economic freedom score has declined for three years in a row. Since 2011, economic freedom in Thailand has fallen by 2.3 points. Score declines in a majority of the 10 economic freedoms have been led by double-digit declines in investment freedom and labor freedom and a nearly double-digit drop in the control of government spending.
Political unrest and conflict between rural and urban voters have led to increased perceptions of corruption and an unsteady investment climate. A growing foreign automobile manufacturing industry provides evidence of the benefits of increasing economic openness, but the business environment for small entrepreneurs remains difficult due to inefficient business and labor regulations.
Thailand has experienced 19 military coups since becoming a constitutional monarchy in 1932. The government returned to democratic civilian control in December 2007, but political turmoil continues. In the July 2011 parliamentary elections, Pheu Thai, the opposition party of exiled leader Thaksin Shinawatra, won an outright majority, and Shinawatra’s sister, Yingluck Shinawatra, became prime minister. In spring 2014, Yingluck Shinawatra was ousted from power in a military coup led by Army General Prayuth Chan-Ocha. Elections are not expected until October 2015. Since the coup, freedom of speech and freedom of association have been severely restricted, and leading politicians have been placed under house arrest. About 40 percent of the population is engaged in agriculture, but a thriving manufacturing sector contributes significantly to the economy.
Corruption and graft are widespread at all levels of government and society amid unprecedented levels of political instability. Before a May 2014 military coup replaced the democratically elected government, the independent judiciary had been generally effective in enforcing property and contractual rights but remained vulnerable to political interference. Private property has generally been protected, but the legal process is slow.
Thailand’s top individual income tax rate has been reduced from 37 percent to 35 percent. The top corporate tax rate is 20 percent. Other taxes include a value-added tax and a property tax. Overall tax revenues equates to 15 percent of the domestic economy. Government spending amounts to 24.9 percent of domestic production, and public debt equals 45 percent of gross domestic product.
Forming a business takes almost a month, but no minimum capital is required. Licensing requirements remain onerous. Reform of the relatively rigid labor market has lagged. The new military government imposed price controls and expanded its power over state-owned enterprises (e.g., in the utility, energy, telecommunications, banking, agriculture, and transport sectors) that account for more than 40 percent of GDP.
Thailand’s average tariff rate is 4.9 percent. Tariffs on agricultural imports are especially high. The government restricts foreign investment in many sectors of the economy. The financial system is under strain caused by political instability. Revisions in the Foreign Business Act, intended to open capital markets further to foreign investors, have been largely cosmetic. The banking sector remains relatively stable.