2015 is proving to be a progressive year in terms of economic growth for Thailand, with a rate of annual GDP growth close to 4%. This is a substantial increase from the previous two-year dip averaging around 1.8%, and is forecasted to remain stable in the coming two years.
A quick economic-medic overview
Thai healthcare expenditure in 2015 as a percentage of GDP is 3.76%. In comparison, Indonesia spends 3.7% of GDP on healthcare, and Malaysia spends 4.06%. In terms of GDP per capita, Thailand spends €173 per capita on healthcare, compared to €49 in India, €341 in Malaysia and €3,994 in Germany.
Around 75% of healthcare costs are financed publically, and 25% is sourced privately.
Healthcare provisions have increased greatly in the past 10 years due to the introduction of public universal health insurance schemes and the elaboration of primary and secondary care health facilities, financed publically.
A glimpse at health status and trends
Thailand in the past 10 years has experienced an increase of deaths caused by heart disease, stroke and hypertension. Deaths caused by accidents, in particular traffic accidents, and poisoning have decreased. The death rate is 7.6 per 1000 population and forecasted to continue increasing slowly in the next two years.
The birth rate per 1000 population is decreasing, reaching 9.2 in 2015 and forecasted to continue to decline.
Endocrine, nutritional and metabolic diseases are forecasted to increase most markedly in the next five years. In the past 10 years this category of disease has already increased four-fold.
Thailand is dealing with an economic slow-down after immense growth rates 5 years ago (close to 7%). National political unrest, the emergence of other Southeast Asian nations, the weakening of the Japanese market, amongst other factors, allowed for a loss of business and investor opportunities in this period. Recovery is on its way and growth will proceed gradually. In the coming two years GDP growth is estimated around 4%.
The overall fiscal balance in Thailand is considered sustainable and consistent despite of 2014’s military coup. The Thai government aims at reintroducing democratic elections in 2016, whilst gaining investor confidence and domestic stability.
Around 27% of the total GDP is retrieved from Bangkok alone, 17% from the capital’s vicinities, and the remainder comes from the rest of the country. It is expected that tier-two cities in Thailand will accelerate growth (due to a growth of the middle class in these urban locations) in the coming two years, pushing the development and expenditure of the private sector, public services and infrastructure.
Plans for the future
Thailand currently spends around €11.9 bn on healthcare annually; an expenditure which is forecasted to increase as the economy picks up, and as the urbanization in tier-two cities increases, bringing along with it a greater demand for healthcare services.
The private healthcare sector, as well as public universities, are keen to expand the medical tourism market.
Thailand has signed a bill in 2015 to administer state-granted budgets to 8 key strategic areas and to more than 50 supportive programs. Those most relevant to industry activity and the healthcare sector are the following:
- Facilitating transfer of provisions to local administrative units to handle public services and strengthen their capacity to manage expenditures
- Restoring confidence in the economic and political stability of the country to encourage domestic consumption and foreign trade activities and investment
- Improving the efficiency of the markets
- Improving infrastructural and logistics systems
- Suiting the requirements of the ASEAN Economic Community
- Improving education, health and quality of life for all Thai
- Enhancing health insurance systems
In 2015, the establishment of the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) is expected, which intends to provide a single market and production base in the region, highly competitive and integrated into the global economy. Thailand is hereby expected to face some challenges due to the cheaper production, outsourcing and labor rates that can potentially be offered by its neighbors Laos, Cambodia and Vietnam.
To maintain a competitive edge, Thailand is expected to invest into education in the coming years to avoid a middle-income trap and development stagnation.
Thailand has introduced reforms in the past decade to facilitate international and domestic trade, which have decreased regulatory barriers and improved conditions for businesses.
According to the World Bank, Thailand ranks second amongst East Asian economies in regards to ease of doing business.
Increased political stability, pro-investment policies, the economic recovery globally, Thailand’s free-enterprise economy, low interest-rates, high export potential, and plans to invest into infrastructure will foster favorable business conditions and allow Thailand to continue improving its trade/business environment, and the social standards for its citizens in the coming years.
For further quantitative information on the Thai healthcare system and the macroeconomic climate, please look into our Business intelligence platform or order the TforG Deep Dive report for Thailand containing volumes of 620 surgical procedures in 13 specialisms.