Abstract: Thailand's economic growth of 4.5 percent this year, the same as last year's, is a large drop from the 6 percent that was averaged in the 2002-04 period. This is largely due to depressed domestic demand, as the Thai economy adjusted to high energy prices, rising interest rates and political uncertainties. Only significantly stronger growth in exports, resulting from faster global growth in 2006, averted further reductions in the growth of real GDP.

Poverty incidence has fallen significantly between 2000 and 2004 and there has been further reduction in 2005. However, it is also true that as growth slows, the rate reduction in the number of poor in Thailand slows too. Growth in 2007 is projected at 4.6 percent, with a large upside potential if the Government takes a few quick policy initiatives supportive of the private sector.

This paper contains the following headings: overview, recovery and outlook, and implementation of structural reforms.