Bangkok, October 3, 2025 - Thailand faces mounting climate risks, but smart development can open new economic opportunities, the World Bank says in its new Country Climate and Development Report. Timely investments - to adapt to the extreme weather impacts, reduce emissions, and promote green export opportunities - will help Thailand meet its aspiration of becoming an inclusive and sustainable high-income society.
Floods, heat stress, water shortages and coastal erosion could reduce GDP by 7-14 percent from baseline levels by 2050 without additional adaptation measures. On the other hand, steps to cut emissions will yield gains, including lower power and transport costs, greater energy security, enhanced air quality, and improved economic competitiveness for Thailand. The report also finds that carbon pricing supported by investments can help support Thailand meet its carbon neutrality and net zero targets by 2050 and 2065 respectively.
Thailand also has significant potential to capitalize on growing international demand for green technology. Thailand already leads in eco-friendly air-conditioner exports, supplies around 4 percent of global solar PV exports, and is growing as an EV production hub. Yet green products comprise less than 10 percent of Thailand's total exports. Actions to ease market-entry barriers, lower distortionary tariffs and subsidies, strengthen skills, and promote domestic technological innovation, can increase green exports by 2-3 percent of GDP by 2030.
"Thailand's future competitiveness will hinge on reducing the emission intensity of its economy and shifting production toward greener goods and services-steps that can create new industries, generate high-quality jobs, and keep Thailand attractive to investors in a low-carbon world," said Melinda Good, World Bank Division Director for Thailand and Myanmar. "Through our Building Thailand's Future Today flagship initiative in the lead up to the IMF-World Bank Group Annual Meetings 2026 in Bangkok, we are working with government and partners to advance this agenda."
Thailand is already among the ten most flood-prone countries in the world and the Chao Phraya basin-home to 40 percent of the population and 66 percent of GDP-is particularly vulnerable. Water shortages in key agricultural areas and industrial zones including the Eastern Economic Corridor will worsen with climate change. Coastal erosion-already affecting 30 percent of the Thai coastline-could cost tourism US$1 billion annually by the mid-2040s. Heat stress could slash labor productivity across key sectors.
"Investments in flood mitigation, water security, coastal protection, climate-smart agriculture, and cooling could raise annual GDP by 2-3 percent by 2040 and by 4-5 percent by 2050 compared with a business-as-usual scenario, while protecting people and reducing the risks of extreme events" said Kim Alan Edwards, World Bank Senior Economist and lead author of the report. "Scaling up social protection will be critical to boost the resilience of the most vulnerable to climate shocks and to better address their needs in the aftermath of disasters".
To meet its adaptation and emissions-reduction objectives, Thailand will need US$219 billion in climate-related investments over the next 25 years, or about 2.4 percent of cumulative GDP. While these financing needs are significant, the CCDR shows they can be feasibly met through a combination of carbon pricing, public revenue reforms, and mobilization of private capital.
About the Country Climate and Development Reports
The World Bank Group has introduced Country Climate and Development Reports (CCDRs) as a core tool for integrating climate and development. CCDRs assist countries in identifying and prioritizing actions that address adaptation needs and greenhouse gas emissions in ways that align with broader development objectives. These reports provide data, research, cost assessments, and suggest priority actions to facilitate a resilient and low-carbon transition. They are intended to guide governments, the public, private sector, partners, and The World Bank Group's engagements to enhance funding for effective climate action.
