ASIATODAY.ID, BANGKOK — Thailand is entering a critical phase in its economic trajectory as global competition intensifies and structural vulnerabilities persist.
The country’s growth is projected to slow to 1.6 percent in 2026, weighed down by weaker global trade, elevated household debt, and a slower-than-expected recovery in tourism.
According to the World Bank’s latest Thailand Economic Monitor, the path forward is clear: Thailand’s next phase of growth will depend heavily on its ability to scale up advanced green manufacturing and move into higher-value, low-carbon industries.
Growth is expected to rebound modestly to 2.2 percent in 2027, supported by improving global conditions, stronger private investment, and the realization of foreign direct investment (FDI) commitments.
However, without structural transformation, this recovery may not be sufficient to lift Thailand out of a low-growth trajectory.
Manufacturing: A Strong Base That Must Upgrade
Manufacturing remains the backbone of Thailand’s economy, contributing 25 percent of GDP and employing 16 percent of the workforce, equivalent to around 6.2 million jobs.
Notably, green goods already account for nearly 10 percent of Thailand’s total exports, and on average are more technologically advanced than non-green products.
This positions the country well to capitalize on the global shift toward sustainable production and consumption.
The report highlights several high-potential green value chains:
– Electric vehicles (EVs) and components
– Solar photovoltaic equipment
– Energy-efficient cooling technologies
These sectors offer opportunities to boost productivity, create higher-quality jobs, and strengthen economic resilience.
“Advanced green manufacturing is one of the industries of the future for Thailand and offers a clear pathway to power growth, boost resilience, and deliver high-quality jobs,” said Melinda Good, World Bank Division Director for Thailand and Myanmar on February 11, 2026.
“As Thailand shapes its next growth model, the upcoming IMF–World Bank Group Annual Meetings in Bangkok will be especially timely.”
From Global Air Conditioning Hub to EV Transition Leader
Thailand already plays a significant role in global manufacturing. The country accounts for nearly one-third of the global air conditioner market, representing around 10 percent of global exports.
In the automotive sector, most components currently produced for internal combustion engine vehicles can continue to be used in EVs. This provides a crucial advantage: Thailand can preserve existing jobs while upgrading production toward electric mobility.
According to Kiatipong Ariyapruchya, World Bank Senior Economist for Thailand, the economic upside could be substantial.
“Thailand already has many of the building blocks needed to succeed in advanced green manufacturing and significant untapped potential. Expanding this sector could increase GDP by an additional 2.9 percent by 2035,” he said.
“The opportunity now is to move beyond assembly toward higher-value production.”
Reform is Essential
The World Bank underscores that industrial transformation will require comprehensive reforms, including:
– Strengthening competition in services and infrastructure
– Attracting high-quality investment and facilitating technology transfer
– Supporting local supplier development
– Providing clear incentives for low-carbon production
– Upgrading workforce skills through industry-aligned training and reskilling
In addition, rebuilding fiscal space through more efficient public spending and a broader revenue base will be critical to sustaining reform efforts and financing long-term transformation.
A Defining Moment for Thailand
As global demand shifts toward low-carbon and technology-intensive products, Thailand faces a strategic choice: remain a conventional production base or evolve into a regional hub for advanced green manufacturing.
The World Bank’s message is clear: without a decisive move into industries of the future, Thailand risks prolonged stagnation.
With the right policy mix and investment strategy, however, advanced green manufacturing could become a new engine of sustainable, inclusive, and globally competitive growth. (AT Network)
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