Key facts
- Thailand should attract more battery and component suppliers from South Korea and Japan to become an EV export hub.
- The World Bank advised Thailand to build more diversified supply chains for economic growth.
- A senior World Bank economist suggested targeted borrowing for investments in future-oriented industries.
- Advanced green manufacturing, including electric vehicles, is identified as a key growth area for Thailand.
- Expanding advanced green manufacturing could boost Thailand's GDP by an additional 2.9% by 2035.
The World Bank has advised Thailand to enhance its position as a regional electric vehicle (EV) export hub by attracting more suppliers from South Korea and Japan, according to a report released Thursday. The multilateral lender emphasized the critical need for diversified supply chains to support the Southeast Asian nation's economic growth.
A senior World Bank economist, Dr. Kiatipong Ariyapruchya, warned that Thailand faces significant structural risks, including an energy crisis, shrinking fiscal space, and an aging population. He advocated for targeted borrowing to invest in future-oriented industries rather than relying on short-term fiscal measures. Dr. Ariyapruchya stated that if borrowing drives stronger GDP growth, the debt-to-GDP ratio will naturally decline over time.
The report highlights advanced green manufacturing, particularly in electric vehicles and solar equipment, as a promising pathway for Thailand's economic revitalization. It notes that Thailand already possesses strong capabilities in EV parts and energy-efficient cooling technologies, with its air conditioners accounting for a significant portion of the global market. Expanding advanced green manufacturing could potentially increase Thailand's GDP by an additional 2.9% by 2035.
Manufacturing remains a central pillar of Thailand's economy, contributing 25% to GDP and employing 6.2 million people. The World Bank's analysis indicates that Thailand's exports of green goods are already technologically advanced and represent nearly 10% of its total exports. To capitalize on these opportunities, the report recommends policies that attract investment, facilitate technology transfer, strengthen local suppliers, and provide incentives for low-carbon production.