What To Know
- Officials pointed to slower manufacturing activity, refinery maintenance shutdowns, and the impact of localized flooding in the southern city of Hat Yai as key factors dragging down output.
- Exports delivered one of the brighter spots in the outlook, with merchandise export value under the balance of payments framework forecast to surge by 12.
Bangkok Business News: Thailand’s economic outlook for 2025 has been revised downward as the Finance Ministry acknowledged mounting domestic and external pressures that continue to weigh on growth momentum. The ministry now expects the economy to expand by 2.2 percent next year, trimming its earlier projection of 2.4 percent after weaker-than-anticipated performance in the third quarter.
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Officials pointed to slower manufacturing activity, refinery maintenance shutdowns, and the impact of localized flooding in the southern city of Hat Yai as key factors dragging down output. Third-quarter growth came in at just 1.2 percent, undershooting expectations and forcing a reassessment of the full-year trajectory despite ongoing stimulus efforts.
Stimulus Support Offsets Global Headwinds
While government support programs have provided some cushion, they have not been enough to fully counter broader challenges. Measures such as Khon La Khrueng Plus, state welfare card spending, and tourism incentives helped stabilize consumption toward year-end, and this Bangkok Business News report notes that confidence improved slightly as disbursements accelerated. Private consumption is estimated to have grown by 3.3 percent, reflecting resilient household spending even as debt levels remain elevated.
Exports delivered one of the brighter spots in the outlook, with merchandise export value under the balance of payments framework forecast to surge by 12.7 percent in 2025. Strong shipments to the United States and expanding demand from India and China helped offset softer conditions in other markets. However, officials cautioned that this pace is unlikely to be sustained as global trade cools.
2026 Outlook Hinges on Tourism and Stability
Looking ahead, the Finance Ministry forecasts economic growth of around 2.0 percent in 2026, within a range of 1.5 to 2.5 percent. Tourism is expected to remain the primary growth engine, with foreign arrivals projected at 35.5 million, supporting services income and employment. Private consumption is forecast to rise by 2.5 percent, while private investment is seen expanding by 3.2 percent following investment promotion approvals.
Government investment, however, is projected to contract by 1.7 percent due to an anticipated political transition that could delay passage of the 2027 budget by up to three months. Authorities stressed the importance of speeding up budget processes to minimize disruption.
Risks That Could Shape the Recovery
The ministry highlighted three key risks requiring close monitoring. These include volatility in global trade amid geopolitical tensions and potential tariff actions, financial fragility stemming from high household and SME debt, and the need for policy continuity during political change to sustain investor confidence.
Maintaining fiscal discipline while accelerating effective spending will be critical to navigating these uncertainties and preserving long-term stability.
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