Thailand’s Economy to 2037: Making New Merit
Thailand increasingly knows what it is trying to build — new merit after the old. The harder question is whether the machinery to deliver it is being built alongside it.
Part II of MCG's series on Thailand and the 2026 IMF-World Bank Annual Meetings, Bangkok, 12 to 18 October
The World Bank's Thailand Monthly Economic Monitor of 25 September carries two sets of figures that sit awkwardly together. Goods exports accelerated to 22.3 per cent year on year in July, led by AI-related electronics, machinery and parts, and petroleum. Investment promotion approvals reached 1.31 trillion baht, about 38.7 billion dollars, in the first half of 2026, up 37 per cent year on year and concentrated in data centres, electronics and electrical appliances, and renewable energy.
The same report records real wages down about 3 per cent year on year, with average nominal wages at 15,937 baht a month. Unemployment rose to 0.95 per cent in the second quarter, its highest reading in seven quarters, with the number of people out of work up 9.7 per cent. Lending to small and medium-sized enterprises contracted for the sixteenth consecutive quarter, four full years, while credit to large corporates resumed expansion.
The two sets of numbers describe different parts of the same economy. Nothing in them shows that investment in electronics or data centres has depressed wages or squeezed credit to smaller firms, and approvals granted in the first half of 2026 could not plausibly have produced either outcome within the same six months. What the figures do show is that the sectors producing Thailand's strongest headline numbers are advancing faster than several indicators of broad domestic economic strength.
That gap frames the question for Thai economic policy. Thailand's new growth engines are running. Whether they can pull enough of the rest of the economy along with them depends on something other than the volume of capital arriving.
The maps increasingly agree
Productivity, skills, firm capability, technology adoption, regional development and institutional reform are not recent discoveries in Thai policy. Part I of this series set out how long the diagnosis has been available, where the merit of earlier decades went, and how little has moved against it.
The destination they share is high-income status by around 2037, which the World Bank puts at about 5.4 per cent annual growth in GDP per capita against roughly 2.2 per cent since the pandemic.
What has changed is the degree of agreement across documents produced through different institutional processes. Reinvent Thailand's seven priority sectors, the BOI's strategic sectors, the five industries in the World Bank's Building Thailand's Future Today, the four job-creating sectors in the Bank's Country Partnership Framework for FY2027 to 2032, and the proposals the Joint Standing Committee on Commerce, Industry and Banking has put to government converge on a similar set of destinations.
The convergence is deliberate. The Bank's full report states that its five priority industries were selected to align with the BOI's six strategic sectors and Reinvent Thailand's seven.
The 14th National Economic and Social Development Plan for 2028 to 2032, whose guiding concept is repairing and reinforcing the foundations before building the future, organises much of the same material under five pillars. OECD accession sits alongside as an external anchor, and the Bank's report treats it as capable of pulling fragmented reform initiatives towards a single growth strategy.
Agreement of that kind is worth something, and should be read for what it is. The three World Bank products cited here draw on overlapping analysis, data and consultation and should not be treated as three wholly independent confirmations. The observation that matters is narrower: the maps now agree, and the institutions beneath them have not yet been shown to.
From pipeline to capability
The 1.31 trillion baht figure is an investment promotion pipeline. It records projects approved for incentives rather than plant in operation, workers hired, suppliers qualified or output sold. The distance between approval and operation is where Thailand's growth model will be settled.
The chain runs from approval to deployment, from deployment to operation, from operation to orders placed with Thai suppliers, from supplier orders to skilled employment, from skilled employment to Thai management and engineering capability, from that capability to design and development work performed in Thailand, and from design work to productivity gains that eventually appear in wages and in regions outside Bangkok.
Each link can fail on its own. Part I described the longer post-crisis pattern, in which much investment maintained the existing capital stock rather than expanding productive capacity, while gains from improvements in the efficiency with which labour and capital are combined remained weak.
Thai policy has moved onto this ground. Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas told the Bangkok Post on 29 September that the most important reform item in Thailand is to use investment to lead economic growth, and that capital has to be reallocated into the right sectors.
The BOI's stated measure of success has shifted from application volume towards local value creation, high-skill employment, technology transfer and integration with Thai SMEs, which is close to the language of the OECD recommendations. Setting out Thailand's position on 7 October, he put the point more plainly, saying that investment must not be allowed merely to flow through the country, and that policy should require technology transfer to take place and link supply chains into Thai SMEs.
The excise restructuring agreed in principle by the National EV Policy Committee in September is the most pointed instrument, since Thailand's free trade commitments bar tariff changes and excise is what remains. Vehicles imported fully built by companies with no Thai production would pay the top rate, which Ekniti has suggested should be around 30 per cent against 10 per cent today, with lower bands for local assembly and the lowest for deeper localisation. The rates were still not final as of 7 October, when Ekniti said they had been prepared and that a conclusion was expected within the following week or two.
The instruments are better aimed than a decade ago. Whether they are strong enough is a separate matter, and the World Bank's own report supplies the cautions. Thailand ranked sixth in the world for data centre investment inflows in 2026, and the Bank notes that hosting computing capacity does not by itself produce AI capability, domestic value or technology diffusion, that incentives have been large relative to the attention paid to retaining value, and that applicants' benefit plans are not carefully designed. Twelve per cent of Thai firms have adopted any AI technology, against 43 per cent in the United States.
Kristalina Georgieva made the same distinction in her curtain raiser address on her way to Bangkok, locating AI's economic payoff in the productivity that follows adoption rather than in the demand generated by building the infrastructure.
In a firm survey for the report, 37 per cent identified testing and certification delays as a constraint on exporting, and 42 per cent of EV firms reported certification taking more than six weeks. A local-content requirement can raise the Thai share of a product without necessarily raising the technical difficulty of what Thai firms are asked to do.
Finance is the link under the most visible strain. Research from the Bank of Thailand's Puey Ungphakorn Institute for Economic Research finds Thailand's mid-sized firms earning the highest returns on assets while carrying the least debt, which is the profile of companies that could expand and are not being funded to do so. Taken together, the evidence raises a different concern: whether enough capital is reaching the mid-sized and smaller firms best placed to scale into the new supply chains Thailand is trying to build.
Responsibility is not ownership
Reinvent Thailand is the government's answer to the failure Part I identified, which is that Thai reform stalls where objectives cross jurisdictions. At a joint briefing with the three business federations on 21 September, the finance ministry set out named owners in government for each priority sector and each enabling pillar, with timelines, performance indicators and a route for escalating unresolved questions to the deputy prime minister responsible for investment, labour, SMEs or ease of doing business.
Ekniti undertook to convene the four ministers within three weeks and to present a finalised action plan to the Prime Minister a week after that. Private sector participants called it an operational checkpoint rather than a consultation.
Assigning jurisdiction in advance is a reasonable response to a real problem. The World Bank's work on Thai cities supplies the test it now has to pass. Examining why urban infrastructure projects stall, the Bank traces the stated problem of insufficient funding to the absence of bankable projects, meaning projects with defined scope, a realistic financial model, a legal structure that allocates risk and a credible counterparty, and traces that absence in turn to the absence of a real project owner, meaning an institution holding the authority to commit public land and approvals, the fiscal capacity to carry preparation costs, and the technical capability to prepare a project to the standard a lender requires.
Applied to Reinvent Thailand, the test produces questions whose answers can be checked. Can a named owner decide, or only recommend? Can it move money, or must it request a budget from an agency reporting elsewhere? Can it overrule another ministry's objection, or does the objection halt the work? What follows if the four-week deadline passes with no action plan delivered?
None of those questions concerns the speed of Thai administration. Each concerns whether authority, finance, technical capability and accountability for results sit in the same place. East Asia Forum has argued that technocrat-led reform of this kind tends to remain shallow while agencies and incumbent firms continue to benefit from existing discretion, which is the reading worth holding alongside the architecture.
What the EEC shows
Thailand has built an institution of the kind the Bank describes. The Eastern Economic Corridor rests on the Eastern Special Development Zone Act of 2018, a policy committee chaired by the Prime Minister, and an implementing office with statutory powers over planning, land use and approvals inside the zone, coordinating across ministries, state enterprises, provinces and regulators. That profile is unusual in a system otherwise organised around sector ministries.
Thailand's other economic corridors, in the north, the northeast, the central-west and the south, exist in policy statements and cabinet resolutions. None has corridor-specific legislation, an authority with its own budget and regulatory powers, or project preparation capacity of the kind the EEC office carries. The EEC suggests that where Thailand has sought integrated delivery across multiple jurisdictions and agencies, it has sometimes relied on exceptional institutional construction, legislated for one geography at a time.
The EEC is offered as a comparison and not as a verdict on its results. Two-thirds of Thailand's data centres sit inside a zone that already has water scarcity, a planning question of its own. The useful question for Reinvent Thailand is whether a national model built on named owners and indicators can reproduce the functions that made the EEC office able to act, without fresh legislation for every cross-sector problem Thailand wants to solve.
Central coordination, distributed capability
Thailand's stated ambition is a more distributed economy: stronger secondary cities, regional SMEs inside new supply chains, investment beyond Bangkok and several specialised growth nodes. The state being asked to produce that outcome remains centralised in its authority, its financing and its delivery capacity. Local administrative organisations depend on central transfers, face tight constraints on borrowing, and are weakest in exactly the project preparation capability the Bank identifies as the binding limit.
Conventional decentralisation is not obviously the answer, and the Bank's own analysis cautions against treating dispersal as a goal in itself. Modelling in the cities report allocates the same envelope of roughly 20 billion dollars three ways, measured against a no-investment baseline. Concentrating four-fifths of it in Bangkok and its region raises national GDP per capita by about 11.6 per cent by 2050. Reversing the proportions raises it by about 12.4 per cent.
Splitting the money evenly raises it by about 10.9 per cent, below both of the concentrated allocations, because neither Bangkok nor the secondary cities receive enough of the investment impulse to reach the scale at which agglomeration effects operate. That is a model of Thai urban investment and should not be read as a general economic law. It does raise a question that reaches well beyond cities. Thailand maintains a long inventory of strategic industries, corridors, clusters, programmes, committees and provincial ambitions, and the risk is excessive concentration of real capability and excessive dilution of policy effort at the same time.
Distributed capability is not the same thing as dispersed activity. A multi-nodal economy requires several genuinely capable nodes, each able to prepare projects, regulate competently and supply skilled labour. Bangkok generates close to half of national output and remains the anchor in every version of this strategy. Thailand does not need less Bangkok so much as more places capable of doing some of what Bangkok already does well. The combination that would answer the paradox is national coordination strong enough to set direction, selective devolution of execution, and local or corridor institutions with enough authority and capability to count as real owners.
October is the stage
The Annual Meetings arrive into this unfinished machinery. Thailand's programme runs under the theme Thailand's New Horizons: Empowering People, Building Resilience, and the government and the business federations have assembled what they call Thailand's Global Offer, launched at the Bangkok Business Summit on 3 September and positioning the country as a partner in building future industries rather than as a production base.
Ekniti sharpened the pitch on 8 October, presenting Thailand as a middle power and a "Clustered Connector" able to link economies and investment flows as trade fragments. The Global Offer and the connector framing describe what Thailand intends to offer rather than capability already in place.
Carlos Felipe Jaramillo, the World Bank's vice-president for East Asia and the Pacific, has used a formulation of his own, the Thailand Offer, in an interview with The Standard. The two phrases should be kept apart. His advice to Thai business was to inform itself, to scrutinise, and to be persistent enough to force implementation, including by pushing its own government. His intervention is notable because it places persistent private-sector pressure inside the delivery mechanism, rather than treating implementation as a task for government alone.
What the week supplies is an international audience, a deadline against which several Thai workstreams have been timed, and reputational exposure harder to postpone than a domestic review. October is the stage. It is not the result.
What would count as evidence
The strongest argument against reading too much into present weakness is time. Most of the approved investment is recent, and supplier qualification, skilled employment, engineering capability and regional spillovers take years rather than quarters. Weak wages and contracting SME credit in 2026 do not establish that the current investment cycle will fail to diffuse. Central sponsorship may also prove necessary rather than contradictory, since the EEC suggests that regional clusters in Thailand have needed a powerful centre to be built at all.
For that reason the reform architecture is better treated as an experiment whose mechanisms can now be observed. Over the next 12 to 24 months the observables are clear. Approved projects entering construction and operation rather than remaining approvals. Thai suppliers moving into higher-value functions rather than larger volumes of the same work. SME credit turning after four years of contraction. Skilled Thai employment in management and engineering roles, and development work performed in Thailand rather than imported with the capital. Secondary cities producing project pipelines that lenders will finance. Named owners settling disputes between agencies, and regulations amended rather than listed. Clean power, grid, water and skills capacity keeping pace with investment already approved. Wages and measured productivity moving.
Thailand's next growth model is becoming easier to describe. The harder test begins when the presentations end, and it is whether the institutions beneath it start producing different outcomes.
Series note. This is Part II of MCG's series on Thailand and the 2026 IMF-World Bank Annual Meetings, 12 to 18 October 2026. Part I examined what happened to Thai investment, capital allocation and productivity after the delegates last left Bangkok in 1991. Ben Kiatkwankul's companion essay in Asia Sentinel, "Thailand and a Tale of Two IMF Meetings", examines the 1991 meetings and the road to 1997. Part III turns to the Annual Meetings themselves, what Thailand puts on the agenda, and what survives after the delegates leave.
— Ben Kiatkwankul, Partner & Co-Founder
mcg-asia.com | Bangkok
Ben Kiatkwankul is Co-Founder and Partner at Maverick Consulting Group. He advises businesses and institutions on government relations, public affairs and business diplomacy, with a particular focus on Thailand and policy-driven markets across Southeast Asia.
About Maverick Consulting Group
Maverick Consulting Group (MCG) is a strategic advisory firm specialising in government relations, public affairs and business diplomacy. Based in Bangkok, MCG helps organisations understand how government systems actually work, build defensible positions and operate within the institutional, regulatory and political conditions shaping business outcomes.