The Thai economy in 2012 rebounded fromthe severe floods but continues to be affected by theslowdown in the global economy. Real GDP in 2012 isprojected to grow by 4.7 percent supported by the rebound inhousehold consumption and greater investments by both theprivate and public sectors as part of flood rehabilitationand the government s consumption-stimulating measures. Theeconomy is projected to grow by 5 percent in 2013 asmanufacturing production fully recovers and the globaleconomy sees a modest recovery. Exports in 2013 aretherefore expected to grow by 5.5 percent compared to only3.6 percent in 2012. Budget deficit will be 2.5 percent ofGDP for FY2013 plus additional off-budget spending for waterresource management projects in FY2013. Public debt isestimated to be close to 50 percent of GDP in 2013.Thepaddy pledging scheme is estimated to cost around 3.5percent of GDP each year, while the actual losses will berealized once the rice stocks are sold.The minimum wageshave been raised by 40 percent nation-wide in 2012 and willbe raised to a uniform rate of THB300 per day.Developinghigher skills is imperative for higher incomes, livingstandards, and for Thailand to grow sustainably andinclusively.Thailand can do better in enabling the poorand vulnerable groups to participate in productive economicactivities by pursuing a coordinated approach betweenuniversal and targeted social policy.