The Thailand Development Research Institute (TDRI) has warned that Thailand is at serious risk of being overtaken by its ASEAN neighbours if it fails to overhaul its economic model and prioritise the creation of “Good Jobs” and a new production system. (nationthailand)
Speaking at TDRI’s annual seminar, “Reimagining Thailand’s Development Model”, TDRI President Dr Somkiat Tangkitvanich said Thailand has entered a prolonged period of chronic slow growth, expanding at only around 2% per year after once achieving 7% growth, placing it near the bottom of Asia ahead of only Japan.
He cautioned that if current trends continue, Vietnam’s GDP per capita could surpass Thailand’s by 2073, while Thailand’s 20-year national strategy target of becoming a high-income country by 2036 is “almost impossible to achieve” without major reforms.
Slow growth, high debt, fragile households
TDRI’s analysis shows that Thailand’s per capita income grew by an average of just 0.1% between 2021 and 2024, far below what is needed to catch up with advanced economies.
The impact on households and the wider economy is significant:
- Household debt remains above 80% of GDP, limiting purchasing power and adding financial stress.
- Banks are reluctant to lend to SMEs due to non-performing loan risks, constraining business expansion.
- The government has been forced to provide ongoing support to households, farmers and businesses, pushing public debt higher and leaving less room for productive investment.
Dr Somkiat stressed that Thailand is not a country with high unemployment; instead, many people “work but still do not earn enough” to maintain a decent quality of life.
He also linked economic stagnation to broader structural weaknesses — including corruption, lack of transparency, weak rule of law and rising exposure to “grey” money-laundering and transnational crime — warning that these issues could further erode confidence and competitiveness.
Call to focus on “Good Jobs” – not just stimulus
Dr Somkiat argued that past governments have leaned too heavily on short-term stimulus and spending, neglecting the production side of the economy. As a result, the economy is “overburdened and unable to accelerate” in the face of high household debt, weak investment and challenging export conditions.
He called for a nationwide focus on creating “Good Jobs” – jobs that provide adequate income, welfare benefits, safety, and clear career progression. According to TDRI, such jobs are the foundation of:
- Social stability
- Political stability
- Sustainable, inclusive economic growth
“Good Jobs can only exist if citizens have higher skills, the production system is strong and businesses can compete globally,” Dr Somkiat emphasised.
Four-pillar production model to keep pace with ASEAN
To move Thailand out of its low-growth trap and keep pace with its ASEAN neighbours, TDRI outlined a four-pillar production model:
- Revolutionise Thai agriculture
- Shift away from the outdated assumption that around 30% of the workforce must remain in low-productivity farming.
- Embrace high-value agriculture similar to Japan’s premium food products (for example, economic bamboo, Nam Wa bananas, mud crabs and biochar as strong Thai candidates). (nationthailand)
- Upgrade tourism and food services
- Build on Thailand’s status as one of the world’s densest restaurant markets and a “good value” destination.
- Improve product value, IT systems, business succession and global branding, and support overseas expansion of Thai culinary and tourism brands, turning more services into exportable offerings.
- Promote modern services
- Accelerate growth in modern, mobile sectors such as chip design, IT and digital services, professional services and creative industries – areas with fewer trade barriers and high scalability, well-suited to Thailand’s talent.
- Expand the film and series production industry
- Build on the more than 451 foreign productions filmed in Thailand this year, which generated around 7 billion baht, benefiting a wide range of workers from electricians and crews to hotels and transport.
- With stronger incentives and transparent management, TDRI believes this sector could become a major new growth engine.
External headwinds: tariffs, green rules, and global overcapacity
TDRI also pointed out that Thailand is being squeezed by external factors: (nationthailand)
- Higher US tariffs at the strongest levels in decades.
- New environmental trade measures in Europe, such as the Carbon Border Adjustment Mechanism (CBAM) and the EU Deforestation Regulation (EUDR).
- China’s industrial overcapacity, which pushes global industrial prices down.
These pressures make it even more urgent for Thailand to raise productivity and move up the value chain rather than rely on price-based competition.
A warning and a choice
Dr Somkiat concluded that Thailand must “build new engines” if it does not want to fall behind ASEAN. The country must:
- Use labour and capital more efficiently.
- Strengthen production across agriculture, industry and services.
- Reduce over-reliance on government spending.
- Boost productivity and adapt to a world moving towards de-globalisation.
“If we do not start now, Thailand risks falling below our neighbours and drifting further behind the global economy,” he warned.
