Thailand’s economy is being strangled by red tape and outdated bureaucracy, with 91.2% of top executives warning it’s too much. Rigid laws, slow permits and duplication are blocking investment and stalling infrastructure development. It also drags competitiveness down, threatening the country’s regional ranking.
A survey by the Federation of Thai Industries warns that Thailand’s red tape and outdated bureaucracy are choking growth, with 91.2% of executives saying it is too much. Despite lower government employment than in the West, outdated rules and laws, including Section 157 of the Penal Code, block decisive action. Foreigners struggle as every document must be translated, duplicated, and resubmitted. Executives say unless Bangkok slashes red tape, investment, infrastructure, and competitiveness will continue to stall. Bureaucracy is no longer inconvenient—it is a straight-up drag on the economy.
A recent survey by the Federation of Thai Industries (FTI) revealed alarming concerns about Thailand’s economic efficiency. FTI executives reported that outdated, redundant laws and inefficient bureaucracy are holding back growth. As a result, Thailand recorded the lowest GDP growth in ASEAN in the second quarter of 2025.
Mom Luang Pikthong Thongyai, Vice Chairman of the FTI, shared the findings of the September 2025 FTI CEO Poll. The survey, titled “Perspectives on Thailand’s Competitiveness Compared to Competitors in the Region,” evaluated the industrial sector against neighbouring countries.
Executives concluded that Thailand’s industrial competitiveness remains moderate, but structural weaknesses are limiting potential.
Survey finds outdated laws and bureaucratic inefficiency are severely hindering Thailand’s economic growth
“Outdated and complex laws, together with insufficient bureaucratic reform, are key obstacles to economic development,” Thongyai said. “Consequently, Thailand’s GDP grew only 2.8% in the second quarter, the lowest in ASEAN.”
The poll showed that 91.2% of executives identified outdated laws and bureaucratic inefficiency as the main reasons for low GDP growth. In addition, 51.3% pointed to delays in policy implementation and investment in large infrastructure projects. Meanwhile, 46.9% attributed weak growth to reliance on traditional, low-value industries, and 43.4% cited challenges linked to an ageing population and rising household debt.
Executives also highlighted factors undermining industrial competitiveness. A majority of 57.2% identified a shortage of highly skilled labour and workforce development misaligned with market demand. Moreover, 45.5% noted insufficient product development, decreasing product popularity, dumped goods in the market, and intense regional competition.
Technological adaptation emerged as another pressing concern. About 44.8% of respondents indicated that rapid technological changes disrupted operations. Many businesses face a lack of technology, innovation, and digital readiness. Additionally, 40% reported that trade measures by superpowers and ongoing trade wars further limit competitiveness.
Thailand retains industrial strengths and infrastructure advantages but urgent reforms are needed
Despite these challenges, executives recognised Thailand’s strengths. A majority, 73.8%, cited strategic location and infrastructure readiness as key advantages. Furthermore, 40.7% pointed to Thailand’s status as a global food and agricultural production hub. Another 31.7% emphasised the country’s complete supply chain and production base, while 28.3% highlighted its appeal as a regional tourism destination.
Given these findings, FTI executives recommended urgent legal and bureaucratic reforms. They stressed the need to modernise the civil service system, making it transparent, flexible, and responsive to economic and social changes. Specifically, officials should adopt digital technology and automation to simplify permit approvals, reduce complex procedures, and cut time and costs for both the public and private sectors.
Such reforms, executives argued, would improve public service efficiency, foster investor confidence, and enhance Thailand’s long-term competitiveness. They noted that removing bureaucratic bottlenecks is critical to attracting investment and stimulating industrial growth. Without such reforms, Thailand risks falling further behind regional competitors.
Aligning workforce skills and technology adoption is critical to sustaining Thailand’s competitiveness
The survey also highlighted the need to align workforce development with market trends. Many sectors require specialised skills, yet education and training programs remain outdated. Consequently, businesses struggle to hire skilled labour, slowing innovation and productivity. In addition, reliance on traditional, low-value industries exacerbates economic stagnation.
Executives emphasised that technological innovation must become a national priority. Businesses must adopt new technologies to remain competitive regionally and globally. Otherwise, Thai firms may lose market share to rivals who are quicker to implement digital solutions and advanced production methods.
Thailand’s demographic and social trends also pose challenges. The population is ageing, and household debt is rising, limiting domestic consumption. At the same time, Thailand’s industrial base faces intense competition from neighbouring ASEAN economies, which are investing heavily in high-value industries.
Structural reforms in law, bureaucracy, and workforce are essential to unlock Thailand’s economic potential
FTI executives argued that addressing these structural issues could unlock substantial economic potential. Legal reform, bureaucratic efficiency, workforce upskilling, and technology adoption were cited as the pillars of future competitiveness. Furthermore, the government must act swiftly to prevent long-term stagnation and protect Thailand’s industrial position in the region.
The survey indicated that policy delays and slow infrastructure projects are additional growth barriers. Executives noted that faster project implementation would boost investor confidence and accelerate industrial expansion. Moreover, they stressed that regulatory clarity and simplified procedures are essential to attract foreign and domestic investment.
In conclusion, FTI officials painted a stark picture: without decisive reform, Thailand risks falling behind ASEAN peers in GDP growth, industrial competitiveness, and technological advancement.
They urged policymakers to modernise laws, streamline bureaucracy, develop a skilled workforce, and embrace digital innovation. Only through coordinated action can Thailand leverage its strategic location, strong infrastructure, and industrial base to remain competitive.
Immediate reforms in legal frameworks and bureaucracy critical to prevent Thailand from losing more ground
The FTI CEO Poll serves as a warning to the government and private sector alike. Thailand’s current growth trajectory is insufficient, and structural inefficiencies are eroding the country’s potential. Rapid reforms in legal frameworks, civil service efficiency, technology adoption, and workforce development are essential to reverse the decline.
Ultimately, executives concluded that Thailand has opportunities, but time is short. Legal modernisation, bureaucratic efficiency, and digital transformation are no longer optional—they are vital. Without action, Thailand risks being overtaken by regional competitors, losing both investment and market relevance in an increasingly competitive ASEAN region.
A total of 7.4% of the Thai working population work directly or indirectly for the government. Notably, this compares favorably to 18% in the United Kingdom and 15–16% in the United States. Just over 3 million out of a workforce of 40.7 million people work for the Thai government and state-owned industries.
Outdated bureaucracy persists despite modern workforce levels creating major hurdles for progress
Nonetheless, the country is known to have an outdated bureaucracy, which has not changed much in 100 years. For instance, many Thai public administration offices still use antique typewriter machines as backup for older forms and documents.
Certainly, a key problem for foreign businesspeople in Thailand is also the language barrier. This means that for official documents, translations from Thai into English or another language are required, and copies must be submitted in duplicate even for minor procedures.
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This bureaucratic system extends from the government into leading institutions, including banks, financial institutions, and major industrial concerns. Consequently, there is a genuine fear in Thailand of failing to complete paperwork properly because of the country’s laws, such as Section 157 of the Penal Code, which penalises dereliction of duty.
Therefore, there is an understandable fear and reluctance to remove red tape and loosen regulations.
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