OECD urges Thai productivity reforms as working-age population faces 29% fall by 2060

Thailand must revive productivity growth to restart its stalled catch-up with richer economies, Mathias Cormann, secretary-general of the Organisation for Economic Co-operation and Development (OECD), told a Bangkok forum on October 14, 2026. Cormann pointed to a projected 29% decline in Thailand’s working-age population between 2023 and 2060 as a reason to make each worker more productive.

Thailand’s gross domestic product (GDP) per capita rose from 30% of the OECD average in 2000 to 40% in 2013, but remained at 40% in 2024, according to Cormann.

Thai productivity growth also slowed from 4.8% a year in the early 2000s to 1.7% annually since 2020, Cormann noted. With the working-age population projected to contract much more sharply than the OECD average decline of 8% over 2023–2060, Thailand needs stronger output per worker simply to prevent its economy from shrinking.

Speaking at Future-Ready Economy 2026, held alongside the International Monetary Fund (IMF) and World Bank Annual Meetings, Cormann described Thailand as a regional success story whose economic opening had improved the lives of tens of millions. Thailand should regard the gap between its current performance and its potential as an opportunity, with productivity restored as the main engine of growth, he argued.

The OECD forecasts Thai economic growth of about 2.1% in 2027, compared with global expansion of 2.9% in 2026 and 3% in 2027. Cormann warned that successive shocks, including the pandemic, Russia’s invasion of Ukraine, the Middle East conflict, higher energy costs and uncertainty over tariffs and trade, continued to threaten the outlook.

Cormann’s response centred on five connected forms of capital: growth, people, transition, resilience and security. Preparing for the future meant building the ability to adapt, rather than trying to predict every disruption, through competitive markets, effective government decisions, skilled people and strong institutions.

1. OECD calls for stronger competition and better financing

Cormann’s first priority, capital for growth, combined stronger competition with more effective financing. Competitive markets reward innovation, efficiency and new technology while allowing the leading businesses of the future to enter the market, he argued.

OECD Product Market Regulation indicators show that Thailand, Indonesia and Malaysia maintain more restrictions on competition than the OECD average. Cormann identified barriers to entry, complex administrative requirements and restrictions in network industries as major obstacles.

For Thailand, Cormann highlighted electricity, transport and telecommunications, where the state retains a substantial role and entry conditions are particularly restrictive. Protecting these sectors from competition passes higher costs through to businesses and households, he argued.

Cormann advocated better regulation in Thailand, not simply fewer rules. Simpler procedures, lower entry barriers and fair competition between state-owned and private firms would help address the constraints.

Asia’s capital markets also need to allocate funds more effectively, Cormann argued. The region accounts for 56% of listed companies worldwide and 30% of outstanding corporate bonds, yet half the listed companies in six Southeast Asian economies have market values below their net asset values.

Cormann linked Asia’s weak corporate valuations to concentrated share ownership, low dividends, large cash holdings and investor doubts about how efficiently companies use capital. The OECD recommends stronger board accountability, greater transparency over beneficial ownership, protection for minority shareholders and more financing options for businesses not yet ready to list.

Asia generates 39% of global GDP but holds only 20% of global venture capital and private equity assets, according to Cormann. Better company information and closer links between businesses and investors could help narrow that gap.

Artificial intelligence (AI) offers another route to higher productivity. Cormann cited OECD estimates suggesting that faster adoption of more capable AI systems could deliver four times the productivity-growth gains of slow adoption across Group of 20 (G20) economies over the next decade.

Capturing the benefits of AI requires digital infrastructure, trustworthy data governance, cybersecurity and support for small and medium-sized enterprises, rather than adoption concentrated in large companies, Cormann stressed. Thailand’s urban fixed broadband speeds are 80% higher than rural speeds, compared with a 60% gap in Indonesia, illustrating unequal access to the technology’s potential.

2. OECD urges stronger skills and more formal employment

Cormann’s second priority, capital for people, was to improve education and skills while bringing more people into productive, formal employment. Technology’s effectiveness depends on the capabilities of those using it, he argued.

Cormann cited the OECD’s Programme for International Student Assessment (PISA) 2025, released in September 2026, which found that 41% of Thai 15-year-olds performed below baseline proficiency in science, compared with 26% across OECD countries. The corresponding figures were 53% in Indonesia, 46% in Malaysia, 39% in Vietnam and 10% in Singapore.

Only 1% of Thai students were top performers in science in PISA 2025, compared with 7% across OECD countries and 26% in Singapore, according to the figures Cormann presented.

Cormann called for investment in Thai education from early childhood through school and vocational training, followed by learning throughout people’s working lives. Better learning outcomes would help workers produce more as labour supply contracts, while continuous training would prepare them for successive waves of technological change.

Thailand also needs greater labour market participation among women and older people, alongside lower costs for creating formal jobs, Cormann argued. Moving workers out of informal employment would improve access to social protection, training and credit.

For Cormann, strengthening Thailand’s middle class depends on productivity gains translating into wages and on a labour market that allows more people to share in economic growth.

3. OECD links energy diversification to competitiveness

Cormann’s third priority, capital for transition, connected energy security and climate adaptation with the costs facing businesses and households. The economies least affected by the 2026 energy shock were those with diverse supplies, efficient energy use and flexibility to switch sources, he explained.

Cormann recommended diversifying energy supplies, including renewables, investing in electricity grids and storage, improving energy efficiency and reforming regulations and tax structures to reduce costs. The transition concerns competitiveness and protection against shocks as well as greenhouse gas emissions.

Thailand’s agriculture, infrastructure and coastal cities also face climate risks, Cormann warned. Investing in resilience now would cost less than repairing damage later, while targeted assistance for those in need would be fairer and less costly than broad subsidies that weaken incentives to adapt.

4. OECD urges stronger finances to withstand shocks

Cormann’s fourth priority, capital for resilience, was to strengthen the institutions and public finances that allow economies to withstand sudden financial pressure. Cross-border capital supports investment and channels savings towards productive uses, but can reverse quickly when global risks rise.

Emerging-market economies experienced US$86 billion in combined net outflows from bond and equity markets in March 2026, Cormann noted. Emerging Asian economies were nevertheless substantially more resilient than before the global financial crisis.

OECD analysis found that countries with more independent central banks and lower public debt experienced significantly smaller capital outflows during periods of global stress, according to Cormann. Strong policy frameworks therefore help economies absorb external shocks.

The OECD supports gradually removing restrictions on capital movements while allowing countries to respond to instability, Cormann explained. Any protective measures should be transparent, non-discriminatory, proportionate and temporary.

Southeast Asian restrictions on residents investing in foreign shares and bonds remain substantially greater than those in OECD countries, leaving room for further liberalisation, Cormann noted. Reform should proceed gradually alongside stronger macroeconomic frameworks, financial systems and institutions.

Restoring fiscal space, or governments’ capacity to respond financially to shocks, was another priority for Cormann. Rebuilding that capacity should be understood as insurance against future risks, rather than austerity, he argued. Cormann also called for targeted, temporary energy assistance and policies that keep inflation expectations under control.

5. OECD backs diversified supply chains and open markets

Cormann’s fifth priority, capital for security, was to reduce economic vulnerability through reliable partners, diverse suppliers and open markets governed by strong rules. The most secure economies are those with the greatest range of options, not those trying to produce everything themselves, he argued.

Export restrictions on critical raw materials have increased more than fivefold since 2009, according to Cormann. Concentrated supply creates vulnerabilities, while diversification offers protection as geopolitical tensions reshape trade and investment.

Foreign direct investment (FDI) brings technology, skills, management expertise and access to markets as well as money, Cormann stressed. Across Southeast Asia excluding Singapore, inward FDI stocks have risen from 40% of GDP a decade ago to about 60% today.

Every Southeast Asian economy still has regulatory restrictions on foreign investment above the OECD average, particularly in real estate, construction, transport, telecommunications, media and finance, Cormann noted. Policy choices would determine how much the region benefits as supply-chain diversification changes where companies invest.

Trade facilitation reforms have already reduced Southeast Asian trade costs by 6%, according to Cormann, although customs procedures, digital documentation and border management still need improvement. Regional integration increasingly involves services, data and digital payments as well as goods.

Cormann cited OECD analysis suggesting that an ambitious Digital Economy Framework Agreement within the Association of Southeast Asian Nations (ASEAN) could increase Thailand’s trade with regional partners by 24%. Economic security should rest on trusted openness, rather than barriers to international exchange, he argued.

Thailand’s OECD accession could help sustain reform

Thailand’s OECD accession process could help translate the productivity agenda into sustained reform, Cormann argued. Membership negotiations can align national priorities with international good practices, strengthen investor confidence and make the country more attractive to high-quality investment.

The OECD Council invited Thailand to begin accession discussions in June 2024, and Prime Minister Anutin Charnvirakul personally submitted the country’s Initial Memorandum in December 2025. The memorandum assesses Thailand’s alignment with OECD standards and good practices and provides the technical foundation for accession.

Anutin took personal leadership of Thailand’s accession process in 2026, supported by a national committee bringing together deputy prime ministers and key agencies, Cormann noted. Thailand and Indonesia are both pursuing membership.

Twenty-five OECD committees are working with Thailand to review laws, policies and practices covering competition, investment, corporate governance, digital policy, education, trade, the environment and public administration, according to Cormann.

Cormann emphasised that accession can deliver benefits before membership itself, by helping countries organise reforms, maintain momentum and strengthen their ability to withstand shocks. For Thailand, the process offers a way to sustain improvements in productivity, competition and skills while deepening participation in the rules-based global economy.