Thailand’s economy is expected to grow by 4.3 percent this year from 5 percent in 2006. This is due to weak domestic demand and shrinking investor confidence, resulting from higher oil prices and political as well as policy uncertainty. 

Even though the country’s macroeconomic fundamentals remain strong, the need to revive private investment next year is critical for Thailand to sustain future growth. Public investment is also key in reviving investor confidence and improving the investment climate in Thailand.

In order to maintain growth and strengthen Thailand’s competitiveness, the new elected government should build on the reform programs already adopted by the interim government. The Bank also recommended reducing regulatory burden to improve the investment climate and the productivity of the service sector, as well as helping Thai workers to develop the skills that are in demand.