World Bank says investing in Thai secondary cities could lift GDP per capita 12.4% by 2050
World Bank modelling favours directing 80% of a US$20 billion investment package to Thailand’s secondary cities, while improving Bangkok’s efficiency
- A World Bank model indicates that directing 80% of a US$20 billion urban investment to Thailand's secondary cities could raise national GDP per capita by 12.4% by 2050.
- This "secondary cities first" investment strategy is projected to yield greater long-term growth than focusing investment primarily on Bangkok (11.6% lift) or splitting it equally (10.9% lift).
- The recommendation is based on findings that Bangkok is experiencing diminishing returns from investment due to rising costs from economic concentration, such as congestion and environmental issues.
- The overall goal of this strategy is to help Thailand achieve high-income status by 2037 by developing a network of economically strong secondary cities that complement Bangkok.
The World Bank urged Thailand on September 22, 2026, to strengthen secondary cities alongside Bangkok to help achieve high-income status by 2037. Its modelling shows that directing 80% of a US$20 billion urban investment envelope to secondary cities could lift national gross domestic product (GDP) per capita 12.4% above a no-investment baseline by 2050.
The World Bank launched “Thailand Cities of the Future: Urban Foundations for a High-Income Economy” with the Program Management Unit on Area-Based Development (PMU-A) and the Urban Design and Development Center (UDDC). The report examines how urban development can support Thailand’s economic transformation.
Thailand needs annual GDP per capita growth of about 5.4% over the coming decade to reach high-income status by 2037, according to the World Bank. Real GDP per capita grew by an average of 2.2% a year in 2021–2024.
Alejandro Alcala Gerez, the World Bank’s operations manager for Thailand and Myanmar, stressed that Bangkok must retain its role as a gateway to global markets and a centre for innovation while secondary cities become stronger economic partners.
“We need to strengthen secondary cities so that they complement one another, through infrastructure that can withstand disasters and strong local institutions,” Alcala Gerez said.
Weerasak Kowsurat, former tourism and sports minister and chief adviser to the commerce minister, called for development to extend across administrative boundaries through clusters of cities. The visitor economy could help attract skilled people and investment to those areas, Weerasak said.
Ennoo Suesuwan, a member of the National Economic and Social Development Council, argued that GDP growth above 5% was necessary for Thailand to become a high-income country, but stressed that “a city is its people”.
“Development should therefore move beyond centralised instructions, as in the past. Power must be decentralised, bringing people and local authorities together to help plan, act and vote, so that people of every age can live happily and sustainably in their own cities,” Ennoo said.
Steven Louis Rubinyi, a World Bank specialist in urban development and the report’s lead author, highlighted cities’ central economic role. Urban districts generated nearly 90% of Thailand’s economic growth between 2010 and 2020 and support five industries of the future: advanced manufacturing, digital services, wellness and sustainable tourism, agrifood and creative industries.
Bangkok faces diminishing returns from investment
The World Bank finds that Bangkok is experiencing diminishing returns as the costs of economic concentration rise. The report cites output of about 7.1 trillion baht for Bangkok and its surrounding region in 2019, close to half the national total.
Research cited in the report estimates that congestion and its associated costs consume 7–10% of Bangkok’s gross regional product each year. Another estimate puts the annual burden above US$15 billion.
Despite Bangkok’s expanding rail network, only 28.9% of the city’s urban population lives within one kilometre of a major rail station, according to the report.
Flooding costs Thailand an estimated US$18 billion annually, equivalent to about 3% of national GDP, the World Bank reports. Bangkok also faces growing heat exposure, with projections indicating close to 300 days above 35°C each year by mid-century, particularly under higher-emissions scenarios.
Without policy intervention, the report projects Bangkok’s economic growth slowing from around 3.5–3.7% in the early 2030s to just above 2% by mid-century.
Secondary cities offer greater long-term growth potential
Thailand’s secondary cities have untapped productivity potential, with population density roughly doubling over two decades without comparable gains in economic performance, the World Bank finds.
A study cited in the report places density–wage elasticity, a measure of how wages respond to increased urban density, at 8.9% across four Thai cities. That compares with 12–19% in developing-country cities.
The World Bank’s modelling of 75 urban centres identifies an investment envelope of around US$20 billion as a turning point in the relative returns from concentrating spending in Bangkok or secondary cities. The report compares three allocation strategies, with gains measured against the same no-investment baseline:
- Secondary cities first: Allocating 80% to secondary cities and 20% to Bangkok produces the largest long-term gain, raising national GDP per capita 12.4% above the baseline by 2050.
- Bangkok first: Allocating 80% to Bangkok and 20% to secondary cities raises national GDP per capita 11.6% above the baseline by 2050. This approach performs better for roughly the first 15 years before the strategy focused on secondary cities overtakes it.
- An equal split: Dividing investment 50:50 produces the smallest gain, with national GDP per capita 10.9% above the baseline by 2050. Spreading resources too thinly prevents either group from achieving the scale needed to maximise productivity gains.
World Bank proposes five foundations for stronger cities
The World Bank calls for better management of Bangkok alongside a network of secondary cities whose economic strengths complement one another. The report identifies five foundations for this urban system:
- Build on each city’s strengths. Develop specialised economic roles, with Chonburi and Nakhon Pathom focusing on industry, Chiang Mai and Phuket on tourism, and Khon Kaen and Hat Yai on medical services and convention centres.
- Make urban land more productive. Improve land use to support greater productivity and attract highly skilled workers.
- Improve connections within and between cities. Develop urban public transport, transport networks linking cities and high-speed internet.
- Design infrastructure to withstand disasters. Incorporating climate resilience from the outset adds about 3% to upfront costs but can prevent much larger losses over the infrastructure’s lifetime.
- Strengthen local institutions. Decentralise fiscal powers and allow municipalities to borrow for urban development within clear rules. Apply lessons from the Eastern Economic Corridor (EEC) to support coordinated, long-term planning.
Thailand needs cities prepared for an ageing population
Thailand must adapt its cities for older residents as the working-age population is projected to shrink by nearly 30% between 2020 and 2060 without policy adjustments, the report warns.
With much of Thailand’s workforce concentrated in urban areas, the World Bank argues that age-friendly cities will be essential to preserving labour productivity and supporting the country’s transition beyond middle-income status.
