The ranking is based on four key areas: economic performance, government efficiency, business efficiency and infrastructure. IMD uses 172 statistical indicators and 92 indicators from an executive opinion survey, making a total of 264 indicators.
Economic performance slips despite investment gains
Thailand’s economic performance fell from eighth to 10th place, weighed down by weaker rankings in international trade and employment.
The country’s international trade ranking dropped five places to ninth, while employment slipped from third to fourth.
Some areas still showed improvement. International investment climbed six places to 24th, while the price-related indicator rose one place to 12th. The domestic economy remained unchanged at 38th.
The figures suggest that while Thailand continues to perform relatively well in some external economic areas, its overall economic momentum is being held back by uneven domestic performance and structural constraints.
Governance remains a key weak spot
Thailand’s government efficiency ranking stayed at 32nd, the same as the previous year.
Several sub-indicators improved. Tax policy rose to seventh place, public finance ranked 29th, the institutional framework ranked 46th and the societal framework ranked 39th.
However, TMA said public-sector governance remains a major concern. Thailand ranked 57th for rule of law, 52nd for corruption and 51st for government transparency.
Business legislation and regulations also remained weak, ranking 40th. According to the executive opinion survey, regulations are still viewed as an obstacle to business operations and to improving national competitiveness.
Productivity remains Thailand’s long-term risk
Thailand’s business efficiency ranking improved from 24th to 21st, supported by stronger performance in several areas.
Productivity and efficiency rose to 37th place. The labour market improved seven places to 10th, finance climbed six places to 31st, and management practices rose to 24th.
The only business-efficiency sub-factor to decline was values and attitudes, which fell three places to 25th.
Despite the improvement, TMA warned that Thailand’s productivity remains low when viewed in greater detail. The weakness can be seen in overall productivity, labour productivity and productivity across key economic sectors.
The association said this issue must be addressed urgently if Thailand wants to maintain its competitiveness over the long term.
AI becomes new competitiveness battleground
Thailand’s infrastructure ranking improved from 47th to 45th, helped by a five-place rise in basic infrastructure to 20th.
Health and environment improved to 56th, while education rose to 52nd. However, both areas remain low compared with many other economies.
Scientific infrastructure stayed unchanged at 37th, while technological infrastructure fell sharply by seven places to 39th.
TMA said the decline was partly due to IMD’s introduction of new artificial intelligence indicators in this year’s assessment. IMD added nine AI-related indicators, highlighting the growing role of AI in determining national competitiveness.
The shift means Thailand must move faster to build digital and AI capabilities if it wants to compete with more advanced and fast-rising economies.
Vietnam’s debut adds pressure on Thailand
Thailand ranked third among the six ASEAN economies included in the IMD ranking, behind Singapore and Malaysia.
Singapore ranked first globally, while Malaysia placed 15th.
Vietnam, included for the first time, ranked 27th globally, just one place behind Thailand. More notably, Vietnam ranked two places above Thailand in government efficiency and six places above Thailand in business efficiency.
The Philippines and Indonesia ranked 47th and 48th respectively.
Vietnam’s close ranking is likely to intensify pressure on Thailand to improve its business environment, strengthen governance and accelerate productivity and technology reforms.
TMA urges reforms in AI, laws and productivity
TMA said Thailand’s higher ranking is a positive sign, but not enough to secure a long-term competitive advantage.
The country still faces challenges from geopolitical tensions, uncertainty in global trade, climate change and the rapid development of AI.
The association said Thailand must urgently modernise laws and regulations to keep pace with global change. It also called for stronger law enforcement, greater transparency and improved confidence among businesses and investors.
TMA said highly competitive economies tend to have clear institutional frameworks and effective regulatory systems, enabling businesses, citizens and state agencies to make decisions and conduct economic activity efficiently.