Thailand has made considerable economic advances over recent decades, but progress has slowed over the past several years, notably in productivity growth.
By Philip Hemmings, Jens Arnold, Charles Dennery and Isabella Medina, OECD Economics Department
Sustained gains in labour productivity are essential for lifting output per capita and improving living standards. Yet Thailand has seen a marked slowdown in recent years. From 2015 to 2023, labour productivity grew by only 2.1% on average, a sharp decline from 3.7% between 1990 and 2010 and 4.8% between 2010 and 2015. Many countries have faced weaker labour productivity growth, but Thailand’s drop has been especially pronounced (Figure 1). Total factor productivity has also stagnated over 2015–2023, which points to missed opportunities to adopt new technologies and strengthen innovation—both crucial for boosting long‑term economic performance.
Figure 1. Productivity growth has slowed
One way for governments to lift productivity is by updating rules and regulations to promote stronger competition. When firms face real competitive pressure, they are driven to innovate, improve efficiency, and deliver better outcomes.
However, OECD product market regulation (PMR) indicators (Box 1) show that Thailand’s regulatory environment remains one of the least supportive of competition (Figure 2). The data place Thailand among the most restrictive economies, with an aggregate PMR score of 2.4 — the 4th highest out of 47 countries assessed.
Like many emerging market economies, Thailand’s score is well above those of most OECD members, where the average stands at 1.3. This gap highlights significant room for Thailand to streamline regulations, open markets, and create a more dynamic environment for businesses to grow and innovate.
Figure 2. Thailand has considerable scope to make regulation more competition-friendly
The latest OECD Economic Survey of Thailand highlights several policy areas through which strong, targeted regulatory reform could help unlock the country’s productivity potential. One of these is regulation that impedes foreign investment and trade. While Thailand offers incentives such as tax breaks and special visas for high‑skilled foreign workers, some rules still reduce its appeal. In particular, foreign ownership limits in some sectors and relatively high import–export processing fees continue to discourage investment and trade.
Another area with scope for improvement relates to market competition. Oversight of State‑owned Enterprises could be improved, especially regarding anti‑competitive conduct. Thailand’s competition law would also benefit from technical enhancements, including greater public disclosure about investigations into anti‑competitive behaviour.
Thailand could also step up its efforts to continue reducing red tape. Ongoing work to streamline administrative procedures—such as those for starting a business — is welcome, but the PMR indicators suggest that more can be done. Keeping regulatory simplification high on the agenda will help reduce costs, delays, and barriers for firms.
Finally, further progress in anti‑corruption measures could improve business perceptions about economic governance. Thailand still ranks poorly in Transparency International’s Corruption Perceptions Index, standing 116th out of 182 countries in 2025. Stronger action should include full alignment with the OECD Anti‑Bribery Convention and systems that promote transparent, responsible interactions between parliamentarians and lobbyists.
The systematic benchmarking that the OECD PMR indicators allow across a range of policy areas point to specific areas where reforms could foster stronger alignment with international best practice. Such reforms would help Thailand make progress towards its strong ambitions for the future, including becoming a high-income country by 2037.
For more information, please visit the Thailand Economic Snapshot page.
References:
OECD (2025), OECD Economic Surveys: Thailand 2025, OECD Publishing, Paris, https://doi.org/10.1787/426b9bc0-en
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Facts Only
Thailand’s labor productivity growth averaged 2.1% annually from 2015 to 2023, down from 3.7% between 1990 and 2010 and 4.8% between 2010 and 2015.
Total factor productivity stagnated between 2015 and 2023.
Thailand’s Product Market Regulation (PMR) score is 2.4, the fourth highest out of 47 countries assessed by the OECD.
The OECD average PMR score is 1.3, significantly lower than Thailand’s.
Thailand imposes foreign ownership limits in some sectors and has relatively high import-export processing fees.
Thailand’s competition law lacks public disclosure about investigations into anti-competitive behavior.
Thailand ranks 116th out of 182 countries in Transparency International’s 2025 Corruption Perceptions Index.
The OECD recommends aligning Thailand’s anti-corruption measures with the OECD Anti-Bribery Convention.
Thailand aims to become a high-income country by 2037.
The OECD Economic Survey of Thailand 2025 highlights regulatory reform as a key area for improving productivity.
Ongoing efforts to streamline administrative procedures, such as business registration, are noted but deemed insufficient.
State-owned enterprises in Thailand face oversight challenges regarding anti-competitive conduct.
Executive Summary
Full Take
The strongest version of this narrative is that Thailand’s productivity slowdown is a structural issue rooted in regulatory barriers, weak competition, and corruption—all of which stifle innovation and efficiency. The OECD’s data-driven approach lends credibility, framing the problem as solvable through targeted reforms. However, the analysis assumes that deregulation and competition alone will drive growth, which may overlook cultural, educational, or infrastructure constraints. The focus on PMR scores and corruption rankings risks reducing complex economic challenges to quantitative metrics, potentially ignoring local context.
Patterns detected: none
The root cause appears to be a neoliberal paradigm prioritizing market liberalization as the primary driver of growth. This narrative echoes post-Washington Consensus reforms, where institutional quality and competition are seen as universal solutions. Yet, it assumes that Thailand’s productivity gap is purely regulatory, not considering labor force dynamics, education quality, or global supply chain shifts.
Implications for human agency are mixed. While reforms could empower businesses, the emphasis on foreign investment and competition may disproportionately benefit multinational firms over local enterprises. The cost of inaction is clear—stagnant living standards—but the benefits of reform may not be evenly distributed.
Bridge questions: How might Thailand’s unique political economy shape the feasibility of these reforms? Could alternative models, such as industrial policy or state-led innovation, achieve similar productivity gains? What role do labor skills and education play in this productivity puzzle?
Counterstrike scan: A coordinated influence campaign pushing this narrative would likely amplify the urgency of reform while downplaying risks like inequality or job displacement. The actual content, however, presents a balanced OECD assessment without exaggerated claims or emotional appeals, aligning with standard policy analysis rather than manipulation.
Sentinel — Human
The article exhibits strong human authorship signals, with natural stylistic variation, specific policy analysis, and robust sourcing. No significant indicators of synthetic generation were detected.