Book Chapter
Benign growth

Between 1951–2017 Thailand’s real GDP per person grew at an average annual rate of 4 per cent. In the process, the structure of the Thai economy changed radically. The output and employment shares of agriculture both contracted, matched by an expansion in the output share of manufacturing and the employment share of services.

Structural change contributed to economic growth, as relatively unskilled people moved from low-productivity rural employment to more productive urban and peri-urban employment in industry and services. The social and economic flexibility to undergo this dramatic structural change clearly facilitated the massive reduction in extreme poverty that occurred.

Thailand’s long-run growth and structural change have strongly promoted inclusive growth, meaning growth that reduces poverty. The Kuznets hypothesis of an inverted U-shaped medium-term relationship between economic inequality and levels of national income is supported by the Thai data.