Digital Transformation Seen as Key to Thailand’s Economic Resilience

In its newly released Thailand Economic Monitor: Digital Pathways to Growth, the World Bank underscores the transformative potential of digital technologies to bolster Thailand’s economic resilience and competitiveness in a shifting global landscape. The report, launched in July 2025, comes amid signs of moderating growth and calls for urgent reforms to revitalize the country’s economic engines.

Thailand’s gross domestic product (GDP) growth is projected to slow to 1.8% in 2025 and 1.7% in 2026, down from the stronger-than-expected performance in early 2025. Factors weighing on the outlook include global trade tensions, weakening external demand, and sluggish domestic consumption. However, if investment sentiment improves, growth could climb to 2.2% in 2025, signaling room for an upside if reforms are enacted.

“Despite global headwinds, strong performance in the first quarter of 2025 provided a temporary lift, largely thanks to accelerated exports ahead of trade policy uncertainty,” said Kiatipong Ariyapruchya, World Bank Senior Economist for Thailand. “By maintaining macroeconomic stability, shifting towards efficient public investment, and pursuing deep trade partnerships, Thailand can take advantage of changing market dynamics.”

Digital Economy: Thailand’s Next Frontier

A key highlight of the report is the growing role of the digital economy, which already contributes around 6% of Thailand’s GDP, making it the second largest in ASEAN after Indonesia. The sector has proven to be a resilient job generator, with fintech, e-commerce, software development, and digital financial services leading employment gains over the past decade.

Thailand enjoys near-universal mobile internet coverage, and its digital public infrastructure — including ThaID (digital identity) and PromptPay (real-time payments) — is among the most advanced in the region. These systems have accelerated financial inclusion, facilitated e-government services, and enabled MSMEs to enter digital marketplaces.

E-commerce has been a particular bright spot, growing by an average of 10% annually since the COVID-19 pandemic. The report notes that the increasing reliance on online retail and services has opened up new revenue channels for businesses and expanded access to consumers in rural and underserved areas.

“As Thailand prepares to host the World Bank Group–IMF Annual Meetings in 2026, digital transformation is one of the flagship areas of discussion,” said Melinda Good, World Bank Division Director for Thailand and Myanmar. “The lead-up to this global event is an opportunity to showcase key industries — digital services, green manufacturing, agribusiness, sustainable tourism — that shape Thailand’s future.”

Unlocking Digital Potential: Challenges and Solutions

Despite notable progress, the report outlines several key challenges that must be addressed to maximize the digital economy’s contribution:

• Gaps in computing infrastructure and access to high-speed internet in some areas

• Lack of digital skills, particularly among older workers and MSMEs

• Fragmented data governance frameworks and concerns over data protection

• Low levels of R&D investment in emerging tech like AI and IoT

To tackle these issues, the World Bank recommends six strategic priority actions:

1. Expand broadband coverage to underserved areas, especially rural provinces.

2. Boost digital literacy and training for workers across sectors, including women and informal workers.

3. Strengthen data privacy and cybersecurity policies to enhance trust in digital services.

4. Support MSMEs with grants, digital vouchers, and access to cloud services.

5. Promote public-private partnerships to co-finance digital innovation.

6. Scale up digital public services and e-government platforms to improve efficiency.

“Digital technology can open new markets, drive competitiveness, and enable economic diversification,” said Jieun Choi, World Bank Senior Economist for Digital Development. “Thailand can unlock this potential by closing gaps in high-quality data infrastructure and investing in the digital skills of its workforce.”

A Path Forward: From Potential to Performance

With a population of over 70 million and a strong ICT foundation, Thailand is well-positioned to lead digital innovation in Southeast Asia. The report notes that digital adoption across health, agriculture, education, and finance could significantly raise productivity and reduce inequality, especially if accompanied by inclusive policy design.

Moreover, as green and digital sectors converge, Thailand has an opportunity to foster climate-smart digital innovation, such as precision agriculture, smart logistics, and clean energy platforms. This convergence could serve as a cornerstone of Thailand’s 20-Year National Strategy, which envisions an inclusive, high-income digital economy by 2037.

The World Bank’s call to action is clear: digital transformation is not a luxury, but a necessity in the face of slowing global growth, rapid technological change, and shifting demographic dynamics. With strategic investment, coordinated governance, and inclusive digital access, Thailand can build a resilient economy capable of weathering future shocks and unlocking long-term prosperity.