Thailand has aspired to become a high-income economy for several years, dating back to the military-led government that outlined the 20-year national strategy for 2018-2037.
The current administration is targeting this goal within 12 years, hoping to elevate Thailand from the upper-middle-income category.
According to the World Bank’s income classification, high-income economies are those with a GNI (gross national income) per person exceeding US$14,375, while upper-middle-income economies have a GNI per person between $4,636 and $14,375.
Most large Southeast Asian economies are in the upper-middle-income group, including Thailand, Malaysia, Indonesia and two newcomers — Vietnam and the Philippines.
Neighbouring Malaysia is on course to enter the high-income group by 2028, as its GNI per person has outperformed its peers.
To achieve high-income status, the government targets raising average annual income per person to 500,000 baht, which will be challenging amid growing economic pressures. GDP growth alone may not be the answer, as structural reforms are also needed.
GDP-DRIVEN FUTURE
Thailand must raise its average annual economic growth rate to 5.4% if it hopes to become a high-income country in the future, said Pimjai Leeissaranukul, chairwoman of the Federation of Thai Industries (FTI).
The target is highly ambitious given Thailand’s sluggish economic performance in recent years.
GDP growth slowed from 2.9% in 2024 to 2.4% in 2025, according to the National Economic and Social Development Council. Growth remains weak this year, edging up to 2.8% in the first quarter before slowing to 1.9% in the second quarter.
“If we want to escape the middle-income trap, an average annual growth rate of 5.4% is essential,” Mrs Pimjai said.
Business leaders representing 48 industries under the FTI agreed that Thailand must achieve 5.4% annual GDP growth to attain high-income status by 2037, she said, citing discussions at an FTI meeting on Aug 25.
The government tasked the FTI with developing a joint strategy as the industrial sector remains one of the country’s key economic engines.
Under the proposed framework, the manufacturing sector must help create “industries of the future” to drive growth, contributing 0.8 percentage points to the target of 5.4% GDP expansion.
These future industries include S-curve sectors such as electric vehicles and high-tech manufacturing.
Another growth driver identified by the FTI is “firms of the future”, which are expected to contribute growth of 0.7 percentage points through modernisation of business models, trade and investment practices.
A further 0.7 percentage points is to come from developing a “future workforce” by upgrading the skills and knowledge of Thai workers to meet global market demands.
“Cities of the future”, focused on infrastructure development and smart city projects, are projected to add another 0.4 percentage points to annual growth.
“All these elements must be integrated if Thailand is to achieve 5.4% annual GDP growth,” said Mrs Pimjai.
“Industry offers the largest contribution at 0.8 percentage points, which is why the FTI is bringing together experts and industrial leaders to help formulate practical strategies.”
Thailand’s manufacturing sector must become more competitive globally and maintain manageable production costs if it is to create successful future industries, she said.
However, manufacturers continue to face challenges related to production costs and international competition. Thailand also needs to improve access to advanced technologies and accelerate human capital development to close workforce skills gaps, said Mrs Pimjai.
“The success of this strategy is not the responsibility of any single industry. All sectors must move forward together because every part of the value chain is closely connected,” she said.
For example, even if future industries successfully develop innovative products, the strategy could fail if future-oriented firms are not ready to market and distribute those products effectively, said Mrs Pimjai.
In her view, the government is moving in the right direction and Thailand should aim to join the ranks of high-income economies.
“This is a very challenging task, but if we can achieve it Thailand’s economy will become more prosperous and stable, bringing long-term benefits to the country in every dimension,” said Mrs Pimjai.
HARNESSING AI
Earlier this month the government disclosed it aims to raise total investment from 23% of GDP to 30% by 2029, enabling Thailand to achieve high-income status in 12 years.
Five working groups, including an artificial intelligence (AI) and digital group, were created to achieve this goal.
The AI and digital group seeks to lure 100 billion baht in investment in AI semiconductors and chip design by 2027, while raising the AI contribution to 5% of GDP through investment in infrastructure development and commercial adoption.
Suphachai Chearavanont, chairman of True Corporation, said Thailand needs to harness AI to generate a broad economic impact and develop new industries that can serve the regional market.
“The goal is to create new engines of growth that can ultimately help Thailand break out of the middle-income trap,” he said.
A key challenge is the scale of Thailand’s infrastructure. In 2025, the country had data centre capacity of around 0.2 gigawatts, compared with 31.9GW in China and 53.7GW in the US.
Adding 1GW of capacity requires around 300 billion baht in construction investment.
If Thailand can expand its cloud and AI infrastructure to 10GW within five years, this could generate investment of around 3 trillion baht, said Mr Suphachai.
In addition, Thailand has an estimated 1,003 AI professionals and needs to rapidly expand the pool of skilled talent, he said.
A strong domestic structure could help Thailand attract investment across the AI supply chain, said Mr Suphachai.
Global technology players such as TSMC and SK Hynix may consider expanding their supply chains in Southeast Asia, creating competition among countries seeking to capture these investments.
“If Thailand can attract major global players, it could strengthen the entire value chain from upstream to downstream, and potentially accelerate growth significantly,” he said.
To transform Thailand into an “AI nation”, Mr Suphachai proposed positioning the country as a regional technology hub, fostering an AI startup structure, and developing a large pool of tech professionals to support the expansion of the digital and AI industries.
EMPLOYMENT CHALLENGE
Chanwit Boonchuay, president of the AI Entrepreneurs Association of Thailand and chief executive of Synapes (Thailand), said the government’s ambition to attract a huge amount of AI investment is achievable.
The greater concern is much of this massive investment would be concentrated in infrastructure. The main challenge for Thailand is how to ensure that roughly 300,000 new graduates entering the workforce annually can find jobs, while also creating new career opportunities for the tens of thousands of workers who could be laid off each year by AI, he said.
Thailand’s AI startup sector has expanded rapidly in recent years, but local companies risk being squeezed out by foreign technology providers unless the government provides a more supportive regulatory and procurement environment, said Mr Chanwit.
The number of AI-related companies in Thailand has surged to 677 over the past few years from 300-500.
Although AI is widely expected to create new categories of employment to replace some jobs displaced by automation, these new jobs are not being generated quickly enough in Thailand, he noted.
The domestic AI market is estimated to be worth about 50 billion baht, but foreign companies capture roughly 47 billion of that amount, said Mr Chanwit.
TOURISM ENGINE
Adith Chairattananon, honorary secretary-general of the Association of Thai Travel Agents, said relying heavily on the tourism sector like in the past, when its GDP contribution reached 17-18%, is insufficient to reach a high-income target.
He said Thailand is in dire need of structural reform across all sectors, including the tourism industry. Counting on tourist arrivals is no longer a measure of success, as a higher GDP requires higher income from tourists.
The government’s initiative to shift the tourism economy to a “visitor economy” is a step in the right direction, helping tourism maximise its potential, said Mr Adith.
For example, he said visitors should benefit not only hotels and restaurants, but also other segments such as health and medical services, cultural products, technology, retail, and other creative economic sectors.
The country can raise the value per visitor by upgrading the quality of these segments, which should distribute income to more stakeholders than in the past, capturing demand from foreigners rather than relying solely on domestic consumption, noted Mr Adith.
The government should also set up a visitor economy intelligence platform to provide data-sharing with the private sector, allowing businesses to align their strategies, he said.
For instance, airlines can plan sufficient seat capacity for the next season, while hotels can start employing more workers if demand is expected to rise, said Mr Adith.
Meanwhile, an intelligence platform would give investors an indication of where and when to invest effectively if they have precise predictive analysis, leading to ample supply as well as profitability in tourism areas, which translates into growing economic value, he said.
This type of data can help industries prepare strategies for how many and what kinds of skilled workers will be needed over 5-10 years, allowing the government to work with the education system on recruitment, as well as advising workers on which destinations or fields they can look to for jobs, said Mr Adith.
This strategy relates to Thailand’s goal of finalising its membership in the Organisation for Economic Co-operation and Development, as the accession process not only considers economic size, but also covers standards in investment, the labour market, education and good governance.
“Thailand will not reach high-income status anytime soon if we still rely on the same structures and income-generating tools. Tourism has potential, but it must be shifted to a demand-driven engine to ramp up the country’s productivity, human capital and local economy,” he said.
EDUCATION REFORM
Aat Pisanwanich, a lecturer at the Institute of Economics, Rangsit University, said Thailand is unlikely to achieve high-income status given its current fundamentals.
Thailand’s economic structure has significant disparities between large and small businesses. Large companies have the resources and growth potential, concentrating income among a select group, while most of the population has not experienced a meaningful uptick in income, he said.
“GDP is a myth. When we discuss GDP growth, we should ask how much more money Thais actually have. People are sinking deeper into debt because their incomes are insufficient,” said Mr Aat.
Both household debt and public debt levels are high, with the government borrowing funds for distribution to people rather than investing in structural reforms that would enhance national capability and create sustainable income.
“Governments have failed to address Thailand’s structural economic problems,” he noted.
The country also needs to address corruption, which appears to be worsening, said Mr Aat.
To improve the nation’s prospects, the education system must be reformed because it is the foundation for developing skilled human resources, he said.
The education system should be aligned with the needs of global industries. If specific technical skills are required, educational programmes must adapt to meet those demands, said Mr Aat.
Students should also be equipped to use AI effectively, he said, and AI should be treated as a tool or an assistant. People must understand core subject fundamentals before using AI.
“For foreign companies operating factories in Thailand, the country should develop a Thai workforce that can eventually replace foreign employees in positions such as managers and engineers, enabling more income to remain in the country,” said Mr Aat.
A well-educated populace is more likely to elect capable politicians who can deliver meaningful reforms and enable Thailand to compete with other countries, he noted.
Mr Aat also urged the government to enhance the competitiveness of small and medium-sized enterprises (SMEs).
“SMEs are becoming weaker because they struggle to compete with foreign companies and imported goods,” he said.