Thailand WT/TPR/S/255/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) INTRODUCTION  
1. For over three decades, Thailand has pursued an export-led development strategy, which 
proved successful in transforming the Thai economy in to an important exporter of industrial products 
and brought about rapid economic expansion, especia lly during the early 1990s.  However, the pace 
of growth slowed down in the 2000s, constrained, inter alia , by the deceleration of investment and 
infrastructure bottlenecks.  Although Thailand undertook considerable trade and investment 
liberalization after the 1997 Asian financial crisis, significant market access restrictions remain in 
some services subsectors, which may in part be  responsible for the modest growth of private 
investment.  The authorities ar e currently implementing measur es to revitalize the economy's 
dynamism, including by strengthening infrastru cture and developing the financial sector. 
2. The Thai economy expanded at an annual average of 3.2% in real terms during the period 
under review (2007-10), a slower pace than the 5.7% average growth registered between 2003 and 2006, partly reflecting the effects of the global eco nomic crisis (2008-09).  Throughout most of the 
review period, growth was driven primarily by e xports and to a lesser extent by domestic demand, 
mainly government consumption, while gross invest ment lagged behind significantly (Table I.1).  
GDP per capita rose from US$3,740 to US$4,737 between 2007 and 2010, and Thailand was able to reduce poverty levels and meet its Millennium Development Goals in advance, but significant income 
and regional disparities remain.  
3. Thailand's economy has recorded a persistent imbalance between savings and investment, 
which is the result of a substantial drop in investme nt following the 1997 Asian financial crisis, and is 
reflected in current account surpluses.  The sharp deceleration in investment, which has remained 
below 25% of GDP for most of the period since then , has been identified as a major factor explaining 
the economy's loss of dynamism during the 2000s.
1  The decline in the importance of investment may 
be a point of concern in an economy that is in the process of consolidating development, and could 
worsen production capacity and infrastructure bottle necks if not addressed.  Recognizing the urgent 
need to increase private and public investment so as to fully realize Thailand's growth potential, the 
authorities have implemented significant investment projects in infrastructure over the past three years, under the "Strong Thailand" programme  (see below), and encouraged private-sector 
participation in infrastructure development throu gh public-private partnerships.  Moreover, the 
authorities indicated that private investment has started to rebound since 2010, and they expect the 
saving-investment gap to narrow gradually in the coming years.  
4. The Thai economy is characterized by its heav y reliance on exports, whose share in nominal 
GDP was 71% in 2010.  Therefore, the 2008-09 global economic slowdown and the decline in external demand had an adverse impact on the Thai economy, to which the authorities responded 
swiftly with fiscal stimulus packages and mone tary easing, while refraining from adopting trade 
protectionist measures.  Thanks to the stimulus package and strong macroeconomic fundamentals, and 
supported by a rebound in export demand, the econom y was able to weather the global economic 
crisis and experienced a rapid recovery from the latte r part of 2009.  GDP grew by 7.8% in 2010, and 
is expected to increase by 4% to 5% in 2011.  
5. In the medium- and long-term, Thailand's economic growth faces several challenges.  On the 
external front, these challenges include the slow economic recovery in its industrialized trading 
partners, which suggests that stre ngthening intra-regional trade would help spread risk and diversify 
the economy;  rising oil and other commodity pri ces, which threaten to increase inflationary 
                                                      
1 IMF (2010).  WT/TPR/S/255/Rev.1 Trade Policy Review 
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pressures; and volatile capital inflows, which exert upward pressures on the Thai currency.  Domestic 
challenges include the need to pursue structural reform (e.g. extending the financial market and 
completing fiscal reform); improving the country's infrastructure so as to enhance international competitiveness; and substantially increasing investme nt as a way to rebalance growth, by focusing 
more on domestic demand, while preserving fiscal stability.
2  The prospects of sustained economic 
growth would also be enhanced by deepening trad e and investment liberalization, especially in the 
services sector, and improving the overall investment cl imate so as to boost the domestic and foreign 
direct investment needed to support the current pace of growth.  
(2) RECENT ECONOMIC DEVELOPMENTS  
6. Thailand remains a predominately outward-ori ented economy, with trade in goods and 
services representing some 135% of GDP in 2010.  As  such, it was adversely affected by the recent 
global economic crisis (2008-09), which caused a sh arp contraction in Thai exports of goods and 
services (-12.5%), manufacturing output (-5.1%) and investment (-9.2%) in 2009.  Overall, the economy contracted by 2.3% in 2009.  Domestic political tensions also contributed to slowing 
economic growth during the period under review by reducing consumer confidence and inbound 
tourism.  Since 2010, however, the tourism industr y has started to recover, partly due to the 
implementation of govern ment support measures. 
7. On the positive side, the Thai economy has dem onstrated remarkable resilience, staging a 
strong recovery as of the second half of 2009, especially  in the first quarter of 2010, with GDP growth 
of 7.8% in 2010 as a whole.  As global demand star ted to pick up, Thailand's economic recovery was 
driven by a rebound in exports (mainly manufactur ed products), which in turn boosted industrial 
production and investment.  Domestic demand also contributed significantly to growth, with government consumption increasing by 6% in 2010, owing to disbursements of fiscal stimulus 
programmes and other compensation payments, whil e private consumption rose by 4.8%, supported 
by higher farm incomes (due to rising crop pri ces) and better economic and labour-market conditions.  
Gross fixed capital formation increased substantiall y (9.4%) in 2010, mainly led by a rebound in 
private investment (Table I.1).
3 
8. The Thai Government responded swiftly to th e global economic crisis with accommodative 
fiscal and monetary policies aimed at boosting th e economy and shoring up producer and consumer 
confidence.  The first stimulus package was gear ed to supporting the poor through a combination of 
cash transfers, low-interest loans to farmers, allowances for old people, lower water and electricity 
prices, free public bus and train services, and othe r measures to improve income and reduce the cost 
of living.  A second package, the Thai Khem Kae ng (Strong Thailand or TKK) includes investment in 
physical and infrastructure projects.4  The TKK was launched in October 2009 and is set to run 
through 2012, with an estimated total cost of B 1.43 trillion (about US$47 billion) to be financed 
mostly off-budget.5  Property tax deductions, exemptions from income taxes for small and medium-
sized enterprises, and tax exemptions on income from asset transfers and other debt restructuring 
transactions have also been implemented to boost the economy.  It is estimated that the two packages 
provided a stimulus of some 3% of GDP in the two fiscal years since FY 2007/08.6  On the monetary 
                                                      
2 On the issue of rebalancing growth see Sussangkarn and Nikomborirak (2011). 
3 See also ADB (2010a). 
4 The second stimulus package covers several projects, including transport, water management, and 
energy and alternative energy, among others.  The transpor t project is the largest, accounting for 28.6% of total 
investment projects.  
5 As of 3 June 2011, around 80% of the TKK's budget framework had been disbursed (information 
sourced from the Comptroller General's Department). 
6 Thailand's fiscal year runs from 1 October to 30 September (IMF, 2010). Thailand WT/TPR/S/255/Rev.1 
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policy front, in early 2009 the Bank of Thailand (BOT) pursued an accommodative policy, making 
consecutive cuts to its policy interest  rate to a record low of 1.25% per year, with the aim of helping 
reduce funding costs for borrowers and boosti ng private investment and consumption.  
Table I.1 
Selected macroeconomic  indicators, 2007-10 
  2007 2008 2009 2010a 
Real GDP (Baht billion, 1988 prices) 4,259.0 4,364.8 4,263.1  4,596.1 
Real GDP (US$ billion, 1988 prices) 123.4 131. 0 124.3  145.1 
Current GDP (Baht billion) 8,525.2 9,080.5 9,041.6 10,103.0 
Current GDP (US$ billi on) 247.0 272.6 263.7  318.8 
GDP per capita at current market price (US$) 3,739.8 4,100.1 3,941.7  4,736.8 
National accounts %age change based on constant figures 
Real GDP (2000 prices) 5.0 2.5 -2.3  7.8 
   Consumption 2.9 2.9 0.1  5.1 
        Private consumption expenditure 1.8 2.9 -1.1  4.8 
        Government consump tion expenditure 9.8 3.2 7.5  6.4 
   Gross fixed capital formation 1.5 1.2 9.2  9.4 
   Exports of goods and services 7.8 5.1 12.5  14.7 
   Imports of goods and services 4.4 8.9 21.5  21.5 
          XGS/GDP (at current market price) 73.4 76.4 68.4  71.3 
          MGS/GDP (at current market price) 65.0 73.9 57.8  63.9 
          Net exports of goods and services/GDP 8.4 2.6 10.5  7.4 
Unemployment rate (%) 1.4 1.4 1.5 1.0 
Prices and interest rates %, unless otherwise indicated 
Inflation (CPI, %age change) 2.3 5.5 -0.9  3.3 
   Core inflationb (CPI, %age change) 1.1 2.4 0.3  1.0 
Interbank lending rate (overnight aver age, end-period) 3.8 3.4 1.3  1.4 
Commercial bank minimum lending rate (end-pe riod) 6.85-7.13 6.75-7.00 5.85-6.25  6.12-6.50 
Exchange rate 
Baht/US$ (annual average) 34.52 33.31 34.29  31.69 
Real effective exchange rate (%age change) 5.4 0.0 -2.5 5.5 
Nominal effective exchange rate (%age change) 5.9 -0.6 -0.9 4.5 
% of current GDP, unless otherwise indicated 
Central government balance  
Fiscal balance (including net acquisition of n on-financial assets) -1.3 -0.6 -4.2  -2.5 
Net operating balancec 0.4 0.8 -2.2  -0.2 
Revenue 17.5 18.2 16.6  17.9 
   Tax revenue 15.5 16.1 14.6  15.5 
Expenditure 17.1 17.4 18.8  18.1 
Net acquisition of non-financia l assets 1.7 1.4 2.0  2.3 
Public debt 37.1 37.4 44.3  41.9 
Saving and investment 
Gross saving 32.8 29.9 29.6 .. 
Gross investment 26.4 29.1 21.2 .. 
Savings-investment gap 6.3 0.7 8.4 .. 
External sector 
Current account balance  6.3 0.8 8.3  4.7 
Net merchandise trade  5.2 -0.1 7.4  4.4 
   Merchandise exports 61.2 64.3 57.2  60.7 
   Merchandise imports 56.1 64.4 49.8  56.3 
Services balance 2.4 1.8 2.1  2.1 
Financial account -0.7 4.5 -1.1  5.4 
     
     Direct investment  3.4 1.6 0.3  0.3 
Balance of payments 6.9 9.1 9.1  9.8 
Terms of trade (2005 = 100) 99.2 97.2 100.3  101.1 
Table I.1 (cont'd) WT/TPR/S/255/Rev.1 Trade Policy Review 
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  2007 2008 2009 2010a 
Merchandise exports (%age change) 18.2 15.9 -14.0  28.5 
Merchandise imports (%age change) 9.1 26.8 -25.2  36.7 
Service exports (%age change) 22.3 10.0 -10.4  14.3 
Service imports (%age change) 21.2 16.9 -14.5  12.6 
International reserves (US$  billion) 87.4 111.0 138.4  172.1 
    in months of imports of goods and services 6.4 6.5 10.7  10.0 
Gross external debt (US$ billion;  end-period) 74. 4 76.1 75.3  96.9 
       % of current GDP 30.1 27.9 28.6  30.4 
Debt service ratiod 12.0 8.2 7.5  4.6 
 
.. Not available. 
a Estimates. 
b Core consumer price index exclude s fresh food and energy prices. 
c Including central and local government but ex cluding non-financial public enterprises. 
d Debt service payments as % of exports of goods and services. 
 
Source: Office of the National Economics and Social Development Board online information. Viewed at: 
 http://www.nesdb.go.th/; Ba nk of Thailand online in formation. Viewed at: 
 http://www.bot.or.th/english/pa ges/botdefault.aspx;  the Fi scal Policy Office, Thailand Public Fi nance Data  online 
 information. Viewed at:  http://dw.mof.go.th/foc /gfs/c.asp;  and Intern ational Monetary Fund, IMF Country Report 
 No. 10/344;  and data provided by the authorities. 
9. The rapid recovery of the Thai economy w as underpinned by a stable macroeconomic 
framework, built through the implementation of sou nd fiscal and monetary policies since the 1997 
Asian financial crisis.  These policies resulted in continued current account surpluses, high levels of 
international reserves, and the consolidation of pu blic finances, while at the same time keeping 
inflation subdued.  In addition, structural reform  in the financial sector helped make the banking 
sector more resilient to the international financial tu rmoil.  All these factors contributed to Thailand's 
remarkable recovery from the global economic crisis  and facilitated the authorities' policy response to 
it.  The Thai economy is expected to continue to gr ow in the coming years, albeit at a slower pace.  
According to the Bureau of Macroeconomic Policy of  the Ministry of Finance, economic growth will 
be in the range of 4.0% to 5.0% in 2011, driven by both external and domestic demand (in particular, 
private consumption and investment).7   
10. The sectoral composition of the Thai economy has not changed significantly since its last 
Review.  Services continue to be the largest cont ributor to economic growth , accounting for 42.9% of 
GDP in 2010 (at current prices), but their share has dropped slightly (Table I.2).  In terms of their 
contribution to GDP, the leading services subsectors are wholesale and retail trade, repair of vehicles, and household goods (13.1%), transport, storage and communications (6.8%), and hotels and restaurants (4.7%), although other subsectors such as financial intermedia tion and education have 
expanded rapidly in recent years.  Manufacturing remains the second largest contributor to GDP, 
accounting for 35.6% in 2010, with the vehicle manufacturing and electronics industries showing 
particular dynamism.  The share of agriculture, for estry and fisheries in GDP rose from 10.7% in 2007 
to 12.4% in 2010, due mostly to higher commodity prices.   
11. The rate of unemployment in Thailand is low by international standards.
8  It declined from 
1.4% in 2007 to 1.0% in 2010, after having increase d slightly in 2009 (1.5%) under the impact of the 
economic slowdown (Table I.1).  In 2010, servi ces accounted for 41% of total employment, while 
                                                      
7 Bureau of Macroeconomic Policy (2011). 
8 Reportedly, there seems to be rather a shortage of industrial labour.  The Labour Ministry forecasts 
shortfalls of 400,000 industrial workers in 2011, 700,000 in 2012, and 1.1 million in 2013 ( The Nation , 
"Japanese firms wary of Thai labour sh ortage", 24 April 2011.  Viewed at: 
http://www.asianewsnet.net/home/news.php?id=18663&sec=2 [24 April 2011]). Thailand WT/TPR/S/255/Rev.1 
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agriculture, forestry and fisheries employed 38 .2% of the total labour force, and manufacturing 
another 14.1% (Table I.2).  According to the la bour productivity index, overall productivity per 
worker grew by 1.4% between 2007 and 2010.  Ho wever, there are significant differences among 
sectors, for example, labour productivity in agriculture showed a decrease of 1.0%, while 
manufacturing alone posted a 4.6% increase.  With in the services sector, labour productivity rose by 
4.6% in financial intermediation, but decreased in practically all other subsectors, including in some 
important tourism-related activities, such as hotels and restaurants (-1.7%), as well as in transport, storage and communications (-0.4%).
9      
Table I.2 
Basic economic indicators, 2007-10 
  2007 2008 2009 2010a 
Real GDP (Baht billion, 1988 prices) 4,259.0 4,364.8 4,263.1  4,596.1 
Real GDP (US$ billion, 1988 prices) 123.4 131. 0 124.3  145.1 
Current GDP (Baht billion) 8,525.2 9,080.5 9,041.6 10,103.0 
Current GDP (US$ billi on) 247.0 272.6 263.7  318.9 
GDP per capita at current market price (US$) 3,739.8 4,100.1 3,941.7  4,736.9 
Annual %age change 
GDP by economic activity at constant 1988 prices 
Agriculture, forestry and fisheries 1.2 4.2 1.3 -2.3 
Mining and quarrying 3.8 0.2 0.9 5.2 
Manufacturing 6.2 3.9 -6.1 13.9 
Electricity, gas and water 5.1 4.0 0.9 10.1 
Construction 2.5 -5.3 0.4 6.8 
Services 5.0 1.3 -0.2 4.6 
  Wholesale and retail trade, repair of ve hicles and household goods 5.5 1.0 -0.3 2.7 
  Hotels and restaurants 4.4 1.6 -0.3 8.5 
  Transport, storage and communication 6.0 -0.5 -3.8 4.0 
  Financial intermediation 5.6 8.3 4.0 7.8 
  Real estate, renting and bus iness activities 3. 2 2.5 1.1 3.8 
  Public administration and defence, com pulsory social security 4.6 1.3 0.1 4.0 
  Education 9.8 0.3 5.3 2.4 
  Health and social work 7.3 -0.8 2.0 2.8 
  Social and personal service activity -5.1 0.7 0.5 14.8 
  Other services 2.6 1.8 1.9 -1.2 
% 
Share of main sectors in current GDP 
Agriculture, forestry and fisheries 10.7 11.6 11.5  12.4 
Mining and quarrying 3.3 3.5 3.4  3.4 
Manufacturing 35.6 34.8 34.2  35.6 
Electricity, gas and water 2.9 2.9 3.1  2.9 
Construction 2.9 2.9 2.7  2.7 
Services 44.6 44.4 45.2  42.9 
  Wholesale and retail trade, repair of ve hicles and household goods 14.2 14.2 14.1  13.1 
  Hotels and restaurants 4.9 4.8 4.9  4.7 
  Transport, storage, and communication 7.3 7.1 7.2  6.8 
  Financial intermediation 3.6 3.9 4.1  4.1 
  Real estate, renting, and bus iness activities 2.5 2.4 2.4  2.3 
  Public administration and defence, com pulsory social security 4.4 4.4 4.6  4.4 
  Education 4.2 4.2 4.6  4.3 
  Health and social work 1.9 1.9 2.0  1.8 
  Social and personal service activity 1.4 1.4 1.4  1.4 
  Other services 0.1 0.1 0.1  0.1 
Share of sector in total employment 
Agriculture, forestry and fisheries 39.5 39.7 39.0  38.2 
Mining and quarrying 0.2 0.2 0.1  0.1 
Manufacturing 15.5 14.7 14.3  14.1 
Electricity, gas and water 0.3 0.3 0.3  0.3 
Construction 5.9 6.0 6.1  6.2 
Service 38.5 39.0 40.2  41.0 
  Wholesale and retail trade, repair of ve hicles and household goods 15.4 15.5 16.0  16.4 
Table I.2 (cont'd) 
                                                      
9 Data for 2010 cover up to September only (Bank of Thailand, Labour Productivity Index. Viewed at:  
http://www.bot.or.th/English/Statistics/Graph/pages/ LabourProductivityIndex.aspx. [14 April 2011]).  WT/TPR/S/255/Rev.1 Trade Policy Review 
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  2007 2008 2009 2010a 
  Hotels and restaurants 6.5 6.4 6.9  7.0 
  Transport, storage and communication 2.9 3.0 3.0  2.9 
  Financial intermediation 0.9 1.0 1.0  1.0 
  Real estate, renting and bus iness activities 2. 0 2.0 2.0  2.0 
  Public administration and defence, com pulsory social security 3.5 3.5 3.6  3.9 
  Education 2.9 2.9 3.0  3.3 
  Health and social work 1.7 1.8 1.9  1.8 
  Other community, social and persona l service activity 2.1 2.2 2.2  2.1 
  Other services 0.6 0.6 0.6  0.6 
Other 0.2 0.1 0.1  0.1 
a Estimates. 
 
Source:  Office of the National Economic and Social Development Board online information. Viewed at:  
 http://www.nesdb.go.th/Default.as px?tabid=95 [11 July 2011]; and National Statistics Office online 
 information. Viewed at:  http://web.nso.go. th/en/survey/lfs/lfs2010_tab.htm [11 July 2011]. 
12. Between 2007 and 2010, Thailand's GDP per capita rose from US$3,740 to US$4,737.  Over 
three decades of rapid economic growth (albeit with  some setbacks, such as the 1997 Asian financial 
crisis and the global financial crisis in 2008-09) allowed Thaila nd to significantly reduce poverty 
levels and to meet its Millenni um Development Goal (MDG) of halving poverty between 1990 and 
2015, well in advance of the target date.  In 2009,  the official national poverty headcount ratio was 
8.12% or 5.2 million people.10  However, Thailand has not yet met its MDG plus goal of reducing the 
poverty ratio to 4% in 2009, and income and regional disparities remain.   
13. Despite progress in poverty reduction, inco me inequality, as measured by the Gini 
coefficient11, remained practically unchanged during the review period, at 0.43 in 2010.12  Moreover, 
the incidence of poverty is still high in the Northeast , the North and the South of the country, as well 
as among the elderly, children, and farm workers.  Alleviating poverty in these regions and among 
these population groups is one of the Government's top priorities.  The fight against poverty also 
includes mitigating the adverse effects of the r ecent global economic crisis on the poor, through 
measures like occupational and retraining programmes for laid-off workers, cash hand-outs to low-income households, free transport services, reduced  utility bills, and education subsidies, among 
others.
13  In February 2011, the Governme nt launched a new support programme, Pracha Wiwat  
(People's Agenda), providing informal workers (t axi drivers and street vendors) greater access to 
state-owned financial institutions th rough a special lending scheme.  
(3) MAIN MACROECONOMIC POLICY DEVELOPMENTS  
(i) Inflation and exchange rates 
14. Monetary and exchange policies are the respons ibility of the Bank of Thailand (BOT).  The 
BOT's main objective is to ensure price stability as well as the stability of the financial system.  Since 
May 2000, the central bank has conducted monetary  policy under a flexible inflation targeting 
framework.  In 2009, the core inflation target range was set at 0.5-3.0% per annum, and was maintained unchanged in 2010 and 2011.  The BOT c onsiders this target range appropriate to keep 
Thailand's inflation comparable to that of its trading partners, thus helping maintain export 
                                                      
10 Information from the National Economic and Social Development Board. 
11 The Gini coefficient measures the inequality of income distribution within a country.  It ranges from 
zero, which indicates perfect equality, with every hous ehold earning exactly the same, to 1, which implies 
absolute inequality, with a single household earning a country's entire income. 
12 CIA World Factbook.  Viewed at:  http://www.indexmundi.com/thailand/ 
distribution_of_familiy_income_gini_index.html [4 April 2011]. 
13 National Economic and Social Development Board (2010). Thailand WT/TPR/S/255/Rev.1 
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competitiveness, as well as building consumer and business confidence and enabling sustainable 
economic growth.14  The main policy instrument to achieve the inflation target is the BOT's one-day 
repurchase (repo) rate.15   
15. Hikes in the prices of prepared foods and high oil and commodity prices amid robust 
domestic demand have led to increased produc tion costs and inflationary pressures.16  Therefore, the 
focus of monetary policy is now on keeping infl ation under control without deterring continued 
growth momentum.  However, the authorities are ca utious about the pace of normalization, and the 
real interest rate remains negative.  According to the authorities "… gradual normalization of the 
policy rate remains appropriate for anchoring infl ationary expectations and reducing the risk of 
financial imbalances in the economy."17    
16. During the period under review, Thailand managed to  keep inflation under control (Table I.1), 
with core inflation staying within the BOT's target  range.  In 2008, both headline inflation (CPI) and 
core inflation increased, mainly on account of hi gher world oil and food prices.  However, in 2009 
headline inflation recorded a negativ e rate (-0.9%) and core inflation fell to 0.3%, due to a notable 
decline in energy prices, the effect of price contro ls and subsidies, and the economic contraction.  In 
2010, inflation showed a moderate  pace, with CPI increasing to 3.3% and core inflation reaching 
1.0%.  Nevertheless, higher food prices and th e reduction in excess capacity are exerting new 
inflationary pressures.18  According to BOT's projections, there is  a risk that core inflation may breach 
the upper end of the target inflation band in 2011.19  It is not clear to what extent price controls 
(Chapter III(4)(iv)) are helping to keep the infla tion temporarily in check.  However, the use of 
various measures, including subsidies and maximum prices, may not allow the official data on 
inflation to fully reflect changes in underlying pr ices, and hence slow down the economic adjustment 
necessary to deal with these changes.  
17. Thailand maintains a managed floating exchange  rate regime.  The BOT does not target a 
fixed level for the exchange rate, and intervenes in  the foreign exchange market only in case of excess 
volatility, particularly resulting from speculative cap ital flows.  Large capital inflows and currency 
fluctuations since 2009 have led the BOT to intervene several times in the foreign exchange market to 
keep the baht aligned with other regional currencies.  
18. Persistent current account surpluses and strong capital inflows, have exerted upward pressure 
on the baht over part of the review period, partic ularly in the second half of 2010 when it reached a 
13-year high against the U.S. dollar.  Indeed, as Thailand's economic outlook improved and political 
unrest ended in May 2010, capital inflows increased substantially, leading to strong appreciation of 
the baht against the currencies of Thailand's majo r trading partners in 2010 (Table I.1).  While a 
stronger baht affects export industries with high domestic content (e.g. clothing, footwear, wood 
products, and canned food), capital-in tensive industries such as vehicle manufacturing and electronics 
have benefited from cheaper input imports.  Amid co ncerns of growing inflation, the baht weakened 
                                                      
14 BOT online information.  Viewed at:  http:// www.bot.or.th/English/Mone taryPolicy/Target/Pages/ 
Target.aspx? [4 April 2011]. 
15 On 13 February 2008, when the BOT-run repurchase market was closed, the one-day repurchase rate 
was replaced by the one-day bilateral repurchase rate.  
16 BOT online information.  Viewed at:  http://www.bot.or.th/Thai/MonetaryPolicy/Documents/ 
MPC_42011.pdf [1 June 2011]. 
17 Monetary Policy Committee Decision, 9 March 2011, No. 8/2011.  Viewed at:  
http://www.bot.or.th/Thai/MonetaryPolicy/Docu ments/MPC_22011.pdf.  [5 April 2011]. 
18 World Bank (2010b). 
19 BOT online information.  Viewed at:  http://w ww.bot.or.th/Thai/MonetaryPolicy/Documents/MPC_ 
42011.pdf [1 June 2011]. WT/TPR/S/255/Rev.1 Trade Policy Review 
Page 8 
  
slightly in early 2011, but in the long-run sound economic fundamentals should provide for the 
relative strength of the Thai currency.  
19. The BOT has responded to higher capital inflows by allowing the appreciation of the baht 
against the U.S. dollar and other major currencies, but  at the same time keeping it in line with regional 
currencies.  It has also made sterilized interven tions in foreign exchange markets and focused on 
measures to ease capital outflows, such as lifting the lim its on Thai firms to invest and lend abroad, 
liberalizing opportunities for companies to hedge th eir foreign exchange exposure, raising the limit on 
foreign currency accounts held with banks in Thai land, and relaxing regulat ions on expatriation of 
export proceeds.20  In addition, in October 2010 the author ities reintroduced a 15% withholding tax on 
interest and capital gains earned on Government bonds by foreign investors, a tax that already applied 
to domestic buyers.  The BOT has refrained from usi ng outright capital controls, after the withdrawal 
in March 2008 of the unremunerated reserve require ment (URR) imposed in late 2006 to curb the 
baht's appreciation.  Should capital inflows continue  to increase, the BOT is likely to continue to use 
the exchange rate as a buffer and implement a dditional prudential measures, as appropriate.  
Developing the incipient bond market would also help deal with capital inflows and channel them to 
corporate investment needs, hence providing th e investment boost required to keep the economy 
growing at a fast pace, while also  triggering gains in competitiveness. 
(ii) Fiscal policy 
20. Fiscal policy formulation is the responsibility of the Ministry of Finance, through the Fiscal 
Policy Office.  Under the policy guidelines established in the Fiscal Sustainability Framework, the 
Government is committed to maintaining fiscal discip line through four targets:   the public debt to 
GDP ratio must not be greater than 60%21;  the debt service ratio must not exceed 15% of the budget;  
capital expenditure must be at least 25% of the budget;  and achieving fiscal balance.  
21. Overall, Thailand's fiscal position remained sound during the review period.  The Central 
Government's fiscal balance registered a moderate deficit in FY 2007 and FY  2008, before increasing 
to 4.2% of GDP in FY 2009, owing to a fall in  revenue resulting from the economic contraction and 
tax reductions, and a sharp increase in expenditure driven by the implementation of the stimulus 
packages.  However, the fiscal position improve d in FY 2010 as the economy rebounded, resulting in 
a strong rise in revenue, with the fiscal deficit narro wing to 2.5% of GDP (Table I.1).  Total revenue 
collection increased to 17.9% of GDP in 2010 (mostly  from a rise in tax revenues, which represented 
15.5% of GDP), while expenditure was equivalent  to 18.1% of GDP.  Customs and other import 
duties have continued to decline as a proportion of total tax revenue (5.7% in FY 2010), but this has 
been offset by increased receipts from taxes on in come, profits, and capital gains as well as value-
added and excise taxes.  On the expenditure side , emphasis has been placed on social development 
programmes, which accounted for almost 30%  of budget allocation in FY 2010. 
22. Although the Government has increased borrowing, both in order to finance its fiscal deficit 
and due to the off-budget stimulus programmes, outst anding public debt, at 41.9% of GDP at the end 
of FY 2010, was well below the 60% cap establishe d under the Fiscal Sustainability Framework.  
However, the authorities indicated that the debt burden is expected to peak in 2012. 
23. Rising revenue has allowed the Government to co ntinue an expansionary policy throughout 
FY 2011 to support economic growth.  Some social programmes, originally included as part of the 
                                                      
20 World Bank (2010b). 
21 The ceiling on the public debt to GDP ratio was increased from 50% to 60% in August 2009 to allow 
the Government to use fiscal measures to counter the economic downturn from the global financial crisis. Thailand WT/TPR/S/255/Rev.1 
 Page 9 
 
 
stimulus packages, have now been transferred to the regular budget.22  Also, as an exit strategy from 
the fiscal stimulus, the financing of TKK projects is gradually being transferred to the budget rather 
than relying on borrowing alone.  Overall expenditur es are projected to reach 19.8% of GDP in 2011, 
and the fiscal deficit is expected to widen to 3.2% of GDP.23  
24. A key challenge for the Thai Government will be to find the additional resources necessary to 
meet fiscal needs in the coming years, in partic ular for financing social welfare programmes and 
infrastructure development, while keeping a sound fi scal position.  The Ministry of Finance (MOF) is 
revising the Fiscal Sustainability Framework with  the aim of achieving fiscal consolidation and 
reducing the level of public debt in the medium- to  long-term.  In addition, the MOF is conducting a 
study on tax reform aimed at increasing Thaila nd's competitiveness, while taking into account the 
expected increase in the debt burd en as well as fiscal constraints.  Among the measures that could be 
considered are increasing the scope and rate of excise duties, new land and environmental taxes, 
improving the effectiveness of tax collection, wide ning the tax base by reducing tax exemptions and 
deductions, and streamlining the tax structure.24  However, as of end-June 2011, no reform is expected 
to be undertaken until the new government is in place.  On the expenditure side, at the time of writing 
this report, the Public Finance Act has been appr oved by the Council of State and is awaiting approval 
from the new government. 
(iii) Balance of payments  
25. The balance-of-payments' current account showed a surplus in each year of the review period 
(Table I.3), reflecting a gross saving rate that consis tently exceeded the investme nt rate.  In 2010, the 
current account posted a surplus of 4.7% of GDP , mainly on account of a sizeable surplus in 
merchandise trade.  With the exception of 2008, the trade balance showed a su rplus during the review 
years, reaching a record high of US$19.3 billion in  2009.  Similarly, the services balance showed a 
positive result throughout the period, despite a drop in  tourism receipts in 2009.  The income account 
remained in deficit during the same period, mainly du e to the repatriation of profits and dividends of 
foreign-invested companies in Thailand, while remittances from Thais working abroad exceeded 
those of foreign workers in Thailand.  The financ ial account has shown a more variable trend, with 
modest net outflows in 2007 and 200925, and significant net inflows in 2008 and, in particular, since 
mid-2010.  The financial account recorded a net infl ow of US$17.2 billion in 2010, chiefly in the 
form of portfolio and other investment such as loans.   Inbound foreign direct investment (FDI), which 
had been declining for several years, picked up in 2010.  During the entire review period, the balance 
of payments recorded a surplus, which in 2010 was equivalent to 9.8% of GDP.  
26. Strong capital inflow, current account surpluses, and the BOT's interventions to stem the 
appreciation of the baht have led to a sharp rise in international reserves, which reached 
US$172.1 billion at end 2010,  equivalent to ten months of impor ts of goods and services (Table I.1), 
and the second largest in developing East Asia, after China.26  Thailand's gross external debt increased 
during the period 2007-10, to almost US$97 billion (Tab le I.1).  Nevertheless, the debt service ratio 
declined from 12% to 4.6% over the same period.  As a percentage of GDP, gross external debt 
increased slightly, from 30.1% in 2007 to 30. 4% in 2010. 
                                                      
22 These include a new agricultural price insurance scheme, a pension for old people, a debt refinancing 
scheme and education subsidies (World Bank, 2010b).  
23 World Bank (2010b). 
24 Puapan (2010).   
25 The deficit in the financial acco unt in 2007 and 2009 was mainly attributable to capital outflows 
from Thai portfolio and direct investments abroad, reflecting the relaxation of measures on capital outflows. 
26 World Bank (2010b). WT/TPR/S/255/Rev.1 Trade Policy Review 
Page 10 
  
Table I.3 
Balance of payments, 2007-10  
(US$ million) 
         2007         2008         2009         2010 
Current account 15,681.7 2,157.4 21,866.0 14,836.6 
Goods and services balance 18,703.2 4,456.2 24,892.4 20,616.8 
    Trade balance 12,782.0 -370.5 19,388.0 14,083.3 
       Exports 151,258.4 175,233.1 150,743.4 193,655.8 
       Imports 138,476.3 175,603.6 131,355.4 179,572.5 
    Services balance 5,921.2 4,826.8 5,504.3 6,533.5 
       Receipts 30,361.9 33,399.6 29,941.0 34,038.0 
         Transportation 6,368.8 7,285.0 5,664.4 5,913.5 
         Travel 16,668.8 18,172.8 15,663.2 19,701.7 
       Payments 24,440.7 28,572.8 24,436.6 27,504.6 
         Transportation 5,602.4 7,049.2 5,103.3 6,080.4 
         Travel 5,143.8 5,011.9 4,338.9 5,055.9 
Income balance -6,960.4 -7,069.3 -7,511.0 -10,584.7 
       Credit 7,332.0 8,113.1 5,874.2 6,026.8 
         Compensation of employees 1,634.9 1,898.4 1,637.0 1,763.3 
         Investment income 5,697.1 6,214.7 4,237.2 4,263.4 
       Debit 14,292.4 15,182.4 13,385.2 16,611.5 
         Income on equity 12,394.2 13,529.7 12,157.5 15,386.8 
         Income on debt 1,898.1 1,652.7 1,227.6 1,224.7 
Current transfers, net 3,938.9 4,770.5 4,484.6 4,804.5 
Financial account -1,729.2 12,191.6 -2,777.4 17,200.5 
       Direct investment (net) 8,312.9 4,446.0 879.3 1,009.7 
           Direct investment  in Thailand 11,330.2 8,539.5 4,975.6 6,319.7 
           Thailand's direct investment abroad -3,017.3 -4,093.4 -4,096.3 -5,310.0 
       Portfolio investment -6,726.9 -2,080.4 -5,905.3 10,234.5 
           Assets -9,632.2 439.8 -8,283.6 1,196.3 
           Liabilitie s 2,905.3 -2,520. 1 2,378.4 9,038.2 
      Other investment -3,315.2 9,825.9 2,248.6 5,956.4 
          Assets -6,210.2 13,503.8 5,071.7 -6,178.4 
          Liabilities 2,895.1 -3,677.9 -2,823.1 12,134.8 
             Loans -990.5 268.6 1,441.9 8,718.9 
Net errors and omission 3,149.6 10,344.3 5,038.0 -712.7 
Overall balance of payments 17,102.2 24,693.3 24,126.6 31,324.4 
Reserve assets -17,102.2 -24,693.3 -24,126.6 -31,324.4 
 
Source:  Bank of Thailand (2010) online information.  Viewed at:  http://www.bot.or.th/Englis h/Statistics/EconomicAndFin 
 Ancial/ExternalSector/P ages/StatBalanceofPayments.aspx [29 July 2011]. 
(4) DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
27. The ratio of Thailand's total trade (exports a nd imports) of goods and non-factor services to 
GDP was 135% in 2010, reflecting the economy's openness and high relia nce on foreign trade.  In 
2009, Thailand was the world's 19th largest exporter and the 17th largest importer of goods.  As regards 
world trade in commercial services, it ranked 16th and 14th as exporter and importer, respectively.27  
(i) Composition of merchandise trade 
28. Thailand's exports consist mostly of manufact ured products, which made up 72.5% of total 
merchandise exports in 2010 (75.8% in 2007) (C hart I.1 and Table AI.1).  New and high-tech 
products have become leading export sectors.  Office machines and telecommunication equipment 
(mainly computer components) are the most impor tant export items, accounting for 18.4% of total 
merchandise exports in 2010, followed by  automotive products, chemicals and other 
semi-manufactures.  The shares of traditional manu factures, such as textiles and clothing, in total 
exports continued to decline during the review peri od.  Primary products accounted for 24.2% of total 
merchandise exports in 2010 up from 22.5% in 2007, with the share of agricultural exports increasing 
                                                      
27 WTO (2010).   Thailand WT/TPR/S/255/Rev.1 
 Page 11 
 
 
to 18.0% of total exports, partly due to higher co mmodity prices.  Rice, fish, and natural rubber are 
the most important agricultural export items. 
29. Manufactured goods represented 67% of total merchandise imports in 2010 (Chart I.1 and 
Table AI.2).  Office machines and telecommunication equipment made up the largest share (13.9% of 
total imports), followed by chemicals and transport equipment, the latter consisting mainly of motor 
vehicle parts and accessories.  Primary products a ccounted for 28.6%, slightly less than in 2007.  
Fuels continued to be the main primary import item (17.4% of total imports), while agricultural goods 
represented 6.6% of the import bill in 2010. 
(ii) Direction of merchandise trade 
30. Thai exports to Asian markets and non-traditi onal destinations continued to increase during 
the review period and in particular during the glob al economic crisis, as Thailand sought alternative 
markets (Chart I.2 and Table AI.3).  Shipments to Asia as a whole accounted for 63.3% of Thai 
exports in 2010 (60% in 2007).  In 2010, ASEAN as a group was Thailand's largest market, accounting for 22.7% of total merchandise exports.
28  Among ASEAN, Malaysia and Singapore are 
the two largest export destinations, although ex port shares to other ASEAN partners (mainly 
Indonesia, VietNam, the Philippines, Cambodia, and Lao PDR) have increased in recent years.  China 
has become Thailand's third largest market (after ASEAN and the EU), receiving 11% of total exports 
in 2010, mostly raw materials and intermediate goods.  Exports to some non- traditional destinations 
such as India, Australia, and Switzerland also in creased during the period under review.  On the other 
hand, export shares to the United States, the EU (27) and Japan continued their downward trend, 
although together these three markets still receive 32.1%  of Thailand's exports.  A significant part of 
Thai exports to ASEAN and China are further pr ocessed and re-exported to industrial economies.  
31. With regard to imports, Japan remains by far Thailand's largest supplier, accounting for 
20.8% of total merchandise imports (2010), which consist mainly of capital goods (Chart I.2 and 
Table AI.4).  However, as a consequence of th e recent earthquake and tsunami in Japan, it is 
anticipated that imports from that country w ill decrease in 2011.  ASEAN as a group is the second 
largest source of imports, making up 17.9% of to tal imports.  The share of imports from China 
increased in 2010, as did the shares from other countri es in the Asia-Pacific region (Republic of Korea 
and Australia).  Imports from EFTA countries, part icularly from Switzerland, also increased during 
the period under review.   In contrast, the shares of the United States and the EU(27) declined.  
Imports from Middle East countries, consisting mostly  of oil, made up 11.4% of the import bill in 
2010.   
 
                                                      
28 Exports to ASEAN partners increased steeply (by 55.2%) in the first half of 2010, benefiting from 
tariff cuts that entered into effect in January 2010 under the ASEAN Free Trade Ar ea agreement (ADB, 2010a).  WT/TPR/S/255/Rev.1 Trade Policy Review 
Page 12 
  
Chart I.1
Composition of merchandise trade, 2007 and 2010
2007 2010
(a)    Exports (f.o.b.)
Other 
consumer goods  
7.9
Manufactures
75.8
Total:   US$153.6 billion Total:  US$195.3 billion  
(b)    Imports (c.i.f.)
Iron & steel
8.7
Chemicals
10.7Transport equipment  
5.3
Manufactures
68.8Office
machines &
telecom equip.   
15.2Other electrical
machines  
6.0
Non-electrical 
machinery
8.8Other mining
5.4Fuels
18.0
Non-electrical
machinery
8.9Other
4.4
Other electrical 
machines
6.0Non-electrical
machinery
6.2
Other semi-
manufactures
6.4Transport equipment  
6.5
Chemicals
10.9Manufactures
67.0 Office 
machines &
telecom equip.  
13.9
Total:   US$143.8 billion Total:   US$182.4 billion Per cent
Manufactures
72.5Other electrical
machines
5.7Other agriculture
5.2
Other electrical
machines
6.1
Other 
consumer goods  
8.0Other
1.9Food
12.8
Mining
6.2
Office machines & 
telecom equipment
20.9Other
3.3
Other semi-
manufactures
9.5Mining
6.2Agriculture
18.0
Non-electrical 
machinery
6.9
Source :  UNSD, Comtrade database (SITC Rev.3).Other 
consumer goods 
5.4
Mining
22.0Other 
consumer goods 
8.0
Transport 
equipment
11.8
Other semi-
manufactures
10.5
Other semi-
manufactures
6.3Other agriculture
4.7Food
11.5
Agriculture
6.6Agriculture
5.9
Mining
23.4
Iron & steel
6.4Transport 
equipment
10.9
Office machines & 
telecom equipment
18.4Chemicals  
7.9 Chemicals  
8.7Other 
1.7
Other mining
4.7Fuels
17.4Textiles & clothing
4.1Textiles & clothing
4.7
Agriculture
16.3
 
 Thailand WT/TPR/S/255/Rev.1 
 Page 13 
 
 
 
Chart I.2
Direction of merchandise trade, 2007 and 2010
2007 2010
(a)    Exports (f.o.b.)
Other Asia  
14.7
Asia
60.1
Total:   US$153.6 billion Total:  US$195.3 billion
(b)    Imports (c.i.f.)
Other Asia  
8.8EU(27)
8.4EU(27)
7.6
China
13.3Australia  3.2
Singapore  3.5United States
5.9
Total:   US$143.8 billion Total:   US$182.4 billionPer cent
Asia
63.3Other Asia  
16.5
Middle East
4.4
Japan
11.8
Other Middle 
East  3.5
Korea, Rep. of
4.4Chinese Taipei
4.1United States
12.6
Singapore
6.2
Other Asia  
8.3United States
10.4
Source :  UNSD, Comtrade database.Japan
20.8EU(27)
11.2
Middle East
4.4
Asia
66.1Asia
65.3
Japan
20.9Australia  2.7EU(27)
14.0
Hong Kong, China   
5.7
Japan
10.5Other America
3.7
Malaysia
5.9Australia  3.7
Hong Kong, China  
6.7
Singapore  4.4China
9.7Australia
4.8
Korea, Rep. of   
3.9Other
9.0
Indonesia  3.1Indonesia  2.8Malaysia
5.4Other America
3.4
Africa  3.0
China
11.0Africa  3.5
China
11.8Malaysia
6.0Malaysia
5.1
Chinese Taipei
3.7Other   
3.6Other 
2.4
Singapore
4.6
Other
6.8
Middle E.
12.8Middle E.
11.4U.A.E  4.8
Saudi Arabia  3.2U.A.E.  4.7
Other Middle
East
4.9Saudi Arabia  
3.1United States
6.7Indonesia
3.8Indonesia  3.2
 WT/TPR/S/255/Rev.1 Trade Policy Review 
Page 14 
  
(iii) Composition of trade in services 
32. The trade in services balance reco rded a surplus in each of the reviewed years (Table I.4).  
Despite the setbacks suffered by th e tourism industry during the period, receipts from this subsector 
more than offset payments for transportation, trav el, and other services.  In 2010, travel and passenger 
transportation accounted for 68.7% of total services re ceipts.  With regard to services outflows, freight 
payments have been on the rise, reflecting strong er demand from Thai exporters, as well as royalties 
and licence fees and payments for "other" services  (including operational leasing services, fees and 
commissions, and business, professional, and technical services).  Services represented 14.9% of Thailand's total exports and 13.3%  of total imports in 2010. 
Table I.4 
Trade in services, 2007-10  
(US$ million and %) 
  2007 2008 2009 2010 
Services balance (US$ millio n) 5,921.2 4,826. 8 5,504.3 6,533.5 
Receipts (US$ million) 30,361.9 33,399.6 29,941.0 34,038.0 
(% of total receipts) 
Transportation 21.0 21.8 18.9 17.4 
       Freight 5.3 6.5 4.8 5.3 
       Passenger 13.0 13.0 12.5 10.8 
Travel 54.9 54.4 52.3 57.9 
Government 0.8 1.0 0.9 0.7 
Communication 0.8 1.3 1.2 1.0 
Construction 1.7 1.8 1.6 1.4 
Royalties and licence fees 0.2 0.3 0.5 0.4 
Insurance 1.0 1.3 1.0 0.9 
Other 19.7 18.1 23.6 20.3 
Payments (US$ million) 24,440.7 28,572.8 24,436.6 27,504.6 
(% of total payments) 
Transportation 22.9 24.7 20.9 22.1 
       Freight 9.0 11.8 10.2 11.7 
       Passenger 7.1 5.9 5.4 5.6 
Travel 21.0 17.5 17.8 18.4 
Government 1.0 0.8 0.9 0.9 
Communication 0.7 0.8 0.9 0.8 
Construction 2.6 2.8 3.2 2.6 
Royalties and licence fees 9.4 9.0 9.2 11.2 
Insurance 2.1 2.1 2.3 2.1 
Othera 40.3 42.4 44.9 41.9 
a Including compensation of employees. 
Source: Bank of Thailand online information.  Viewed at:  http://www. bot.or.th/English/ Statistics/Econom icAndFinancial/ 
 ExternalSector/Pages/StatBalanceofPayments.aspx# [15 July 2011]. 
(iv) Foreign direct investment (FDI)  
33. FDI flows into Thailand dropped sharply, by 43.8%, between 2007 and 2010, owing in part to 
the impact of the global economic downturn and dom estic political uncertainty, although they started 
to pick up in the second half of 2010.  The manufacturing sector remained the largest recipient, accounting for 47.5% of total FDI inflows in 2010 (T able I.5).  FDI was particularly targeted to 
export-oriented industries such as electrical applianc es and machinery and transport equipment.  Other 
important recipients of FDI were financial in stitutions, real estate, and mining and quarrying 
activities.  Japan continues to be the main source of  FDI (26.1% of total inflows), although its share 
declined during the review period, especially in 20 10 (Table I.5), followed by the EU and Singapore.  
The share of FDI inflows from the United States dr opped substantially, while that of Switzerland 
showed a strong increase.  FDI inflows from ASEAN, especially from Singapore, dropped significantly from 2007, mainly due to the global financ ial crisis and Thailand's political uncertainties.   Thailand WT/TPR/S/255/Rev.1 
 Page 15 
 
 
Table I.5 
Inflows of foreign direct investment, 2007-10 
(US$ million and %)  
 2007  2008  2009a 2010a 
     
Total inflows (US$ million)  25,009.6 22,073.1 12,926.4 14,060.1 
  (% of total)  
(a)  Inflows by origin  
Japan 31.4 31.1 40.5 26.1 
United States 14.6 6.6 6.4 9.1 
EU(27) 17.1 12.9 16.8 20.2 
   Netherlands 4.8 2.7 5.0 8.0 
   United Kingdom 3.4 4.0 4.0 4.3 
   France 1.5 1.1 1.8 2.2 
   Belgium 0.4 0.2 0.9 1.2 
   Denmark 0.3 0.6 0.9 1.1 
   Germany 4.7 2.8 1.2 0.9 
ASEAN 19.0 15.0 12.6 13.6 
   Malaysia 1.8 0.6 0.7 1.3 
   Singapore 16.3 13.4 11.6 11.9 
Hong Kong 3.5 5.3 2.8 4.6 
Chinese Taipei 0.6 0.3 0.9 1.0 
Korea, South 0.7 0.6 1.1 1.2 
China 0.4 0.2 0.4 0.8 
Canada 0.2 0.1 0.4 0.4 
Australia 1.1 0.8 0.8 1.2 
Switzerland 1.5 3.7 5.6 8.6 
Others 9.9 23.3 11.8 13.2 
(b)  Inflows by sector     
Agriculture 0.0 0.1 0.1 0.1 
Mining and quarrying 7.0 2.3 6.5 8.0 
Manufacturing 38.7 53.1 56.5 47.5 
   Food and sugar 2.0 2.1 3.0 4.3 
   Textiles  0.7 0.6 0.8 0.8 
   Metal and non-meta llic 3.8 3.4 3.7 3.9 
   Electrical appliances 5.9 12.5 11.0 12.8 
   Machinery and transport equipment 13.3 12.7 23.9 9.7 
   Chemicals 2.4 3.3 4.4 4.7 
   Petroleum products 3.2 0.1 1.5 1.5 
   Construction materials 0.1 0.1 0.1 0.1 
   Others 7.2 18.3 8.1 9.6 
Construction 1.0 0.7 0.5 0.7 
Trade 9.6 3.9 6.7 7.8 
Financial institutions 18.5 18.6 11.5 16.4 
Investment 1.3 0.0 0.0 1.9 
Real estate 8.8 7.0 7.5 8.5 
Services 11.3 14.1 8.6 5.8 
Others 3.9 0.1 2.1 3.3 
a Provisional. 
Note Figures cover investment in all sectors. 
Source: Data provided by the BOT. 
34. Although Thailand's FDI framework is genera lly open in manufacturing, there remain 
significant restrictions on foreign-ow nership in other sectors, particularly in services (Chapter IV).  WT/TPR/S/255/Rev.1 Trade Policy Review 
Page 16 
  
Such restrictions, as well as regulatory hurdles, in frastructure bottlenecks, and skill shortages could 
have contributed to lower FDI inflows over the past years, and suggest that there is room to improve 
the investment environment so as to enhance Thaila nd's international competitiveness.  According to 
the World Bank's survey on the ease of doing business, Thailand ranked 19th (out of 183 countries and 
territories) in 2010, seven places lower than in 20 09, but ahead of all other ASEAN countries, with 
the exception of Singapore.  Thailand scored well fo r protecting investors, trading across borders, and 
dealing with licences, but poorly for starting and cl osing a business, paying taxes, and getting credit. 29    
35. Outflows of Thai direct investment abroad mo re than doubled during the period under review 
(Table I.6).  ASEAN as a group is the main destinat ion, and its share increased from 33.5% to 51.3% 
between 2007 and 2010.  Within AS EAN, Singapore is by far the largest recipient, accounting for 
33% of total outflows of Thai direct investment abroad, followed by Myan mar.  The shares of the 
EU(27), the United States, and Japan have all decr eased during the period under review, albeit with 
some wide fluctuations in the case of Japan.  By contrast, outflows of Thai direct investment to Australia and Canada have shown strong increases.  China's share in total outflows of Thai direct 
investment abroad was 3.9% in 2010 (down from 9.7%  in 2009).  Overall, outflows of Thai direct 
investment abroad were directed to mainly mining and quarrying, manufacturing, trade, and financial 
institutions. 
Table I.6 
Outflows of foreign direct investment, 2007-10 
(US$ million and %) 
  2007 2008 2009a 2010a 
Total outflows (US$ million)  4,776.1 7,671.7 8,095.1 9,796.6 
(% of total) 
(a)  Outflows by destination 
Japan 1.9 3.5 6.8 1.0 
United States 6.3 6.0 3.4 5.4 
EU(27) 8.8 5.3 3.3 5.7 
   United Kingdom 7.0 1.6 1.5 3.1 
   Ireland 0.0 0.0 0.0 0.7 
   Lithuania 0.2 1.2 0.5 0.5 
ASEAN 33.5 46.4 43.7 51.3 
   Singapore 7.8 13.4 20.6 33.0 
   Myanmar 16.6 20.5 15.6 12.8 
   Laos 1.9 2.7 1.7 2.1 
   Viet Nam 2.0 2.5 1.4 2.0 
   Indonesia 0.3 1.8 0.7 0.8 
   Malaysia 3.6 4.8 3.2 0.3 
Hong Kong, China 11.6 3.6 3.3 3.1 
Chinese Taipei 0.7 0.3 0.0 0.0 
Korea, South 0.0 0.3 0.0 0.0 
China 6.2 3.6 9.7 3.9 
Canada 0.1 0.0 0.1 3.6 
Australia 0.3 0.5 0.4 5.3 
Switzerland 1.1 0.3 0.1 0.1 
Others 29.4 30.0 29.2 20.5 
  Table I.6 (cont'd) 
 
                                                      
29 World Bank online information, "Doing Business".  Viewed at:  http://www.doingbusiness.org/ 
rankings [20  April 2011].  Thailand WT/TPR/S/255/Rev.1 
 Page 17 
 
 
  2007 2008 2009a 2010a 
(b)  Outflows by sector 
Agriculture 0.1 0.1 0.0 0.2 
Mining and quarrying 27.3 20.9 25.7 28.4 
Manufacturing 19.2 29.9 21.8 18.9 
   Food and sugar 7.9 7.1 3.8 4.3 
   Textiles  0.8 2.4 1.3 0.5 
   Metal and non-metallic products 0.7 2.4 0.9 1.0 
   Electrical appliances 3.5 4.2 2.5 1.3 
   Machinery and transport equipment 1.0 3.7 6.2 1.1 
   Chemicals 1.4 4.1 1.6 3.0 
   Petroleum products 0.0 0.2 0.4 1.1 
   Construction materials 0.1 0.0 0.0 0.1 
   Others 3.7 5.6 5.3 6.5 
Construction 1.8 0.9 0.8 0.6 
Trade 5.8 14.1 12.6 15.2 
Financial institutions 6.5 2.9 11.5 11.2 
Investment 20.7 25.5 15.1 18.4 
Real estate 5.7 2.4 1.8 3.3 
Other services 5.8 3.3 10.7 2.7 
Others 7.1 0.0 0.0 1.1 
a Provisional. 
Note Figures cover investment in all sectors. 
Source: Data provided by the BOT.