World Bank: Green Manufacturing Could Lift Thailand’s GDP by 2.9%

Thailand could unlock a new wave of growth by expanding into advanced green manufacturing, with the potential to raise GDP by an additional 2.9 percent by 2035, according to the latest Thailand Economic Monitor released by the World Bank.

The report positions electric vehicles (EVs), solar equipment, and energy-efficient appliances as strategic industries capable of reinvigorating Thailand's slowing economy while strengthening resilience in an increasingly competitive global environment.

Growth Slows to 1.6% in 2026

Thailand's economic growth is projected to slow to 1.6 percent in 2026, weighed down by:

• Weaker global trade

• High household debt

• Slower tourism recovery

Growth is expected to rebound modestly to 2.2 percent in 2027, supported by improving global conditions, stronger private investment, and foreign direct investment projects translating into real inflows.

Against this backdrop, the World Bank argues Thailand must pivot toward higher-value, low-carbon industries to sustain long-term growth.

Manufacturing Still the Backbone of the Economy

Manufacturing remains central to Thailand's economy, accounting for:

• 25 percent of GDP

• 16 percent of total employment

• 6.2 million jobs

Green goods already make up nearly 10 percent of Thailand's total exports, and these products are, on average, more technologically advanced than non-green exports.

"Advanced green manufacturing is one of the industries of the future for Thailand and it offers a clear pathway to power growth, boost resilience, and deliver high-quality jobs," said Melinda Good, World Bank Division Director for Thailand and Myanmar.

She noted the upcoming IMF–World Bank Annual Meetings in Bangkok as particularly timely as Thailand considers its next growth model.

EVs, Solar and Cooling Tech Identified as High-Potential Sectors

The report highlights three green value chains where Thailand already has strong foundations:

Electric Vehicles and Parts

Most automotive components currently produced in Thailand can continue to be used in EV production, helping preserve jobs while upgrading technology and moving up the value chain.

Solar Photovoltaic Components

Thailand has the capacity to expand into higher-value segments of the solar supply chain as global demand for renewable energy equipment grows.

Energy-Efficient Cooling Technologies

Thailand is already a global leader in air conditioning manufacturing, accounting for:

• Nearly one-third of the global market

• Around 10 percent of global exports

Upgrading into more energy-efficient and climate-friendly cooling systems could significantly increase value-added output.

Clear Policy Framework Needed

To unlock the full potential of advanced green manufacturing, the World Bank recommends:

• Attracting targeted foreign investment

• Supporting technology transfer

• Strengthening domestic supplier networks

• Providing clear incentives for low-carbon production

"Our analysis shows that expanding advanced green manufacturing could increase GDP by an additional 2.9 percent by 2035," said Kiatipong Ariyapruchya, World Bank Senior Economist for Thailand.

"The opportunity now is to move beyond assembly toward higher-value production."

Structural Reforms Critical to Success

Beyond sector-specific policies, the report calls for broader reforms to strengthen Thailand's economic foundations:

• Increasing competition in services and infrastructure

• Aligning skills training with industry demand

• Reskilling workers for EVs, advanced electronics, and green industries

• Gradually rebuilding fiscal space through more efficient spending and broader revenue collection

The World Bank argues these measures are essential to improve productivity, attract higher-quality investment, and support inclusive growth.

A Turning Point for Thailand's Growth Model

As global demand shifts toward low-carbon technologies, Thailand faces a strategic choice: remain concentrated in mid-value manufacturing, or move decisively into advanced green production.

The World Bank concludes that with the right policy mix, green manufacturing could become a new engine of sustainable growth — strengthening competitiveness while creating higher-quality jobs for millions of Thai workers.