Thailand's economy faces significant challenges in 2025, with experts projecting growth rates between 2.05% and 2.7% amid global uncertainties and the return of Donald Trump as US president.
Att Pisanwanich, adviser at Intelligent Company Research Consultant (IRC), warns that Thailand could experience its slowest growth rate in seven years. He identifies five key risk factors: high household debt, investment policy uncertainties, Trump's fiscal policies, Chinese economic challenges, and escalating geopolitical conflicts.
Export prospects appear to be of particular concern, with Att forecasting just 1.9% growth due to proposed US tariff increases. Six major product categories face potential 10% tariffs, including electrical appliances, auto parts, and rubber products. This could result in Thailand's highest trade deficit with China in six years, exceeding 1.6 trillion baht.
Somprawin Manprasert, chief economist at SCB EIC, has revised the global economic growth forecast for 2025 from 2.8% to 2.5%. He anticipates that Trump's policies will intensify trade protectionism and geopolitical tensions, affecting trade, investment, and labour markets globally. SCB EIC expects one policy rate cut to 2% in February 2025, with the Thai baht projected to range between 33.50-34.50 against the US dollar by the year-end.
The Thai economy increasingly shows a divergence between strong and weak sectors. SCB EIC's consumer survey reveals that over 60% of consumers expect worsening economic conditions in 2025, with low-income groups showing particular pessimism. The National Credit Bureau data indicates declining retail loan quality, suggesting persistent household debt challenges.
Chinese tourist arrivals are expected to remain below 7 million in 2025, while Thailand's manufacturing sector continues to struggle with overcapacity issues and competition from Chinese imports. Private investment is projected to recover modestly, though challenges persist in industrial sectors.
The consensus among economists suggests that while Thailand's fundamentals remain relatively stable, success in 2025 will require careful navigation of international relationships, effective policy implementation, and strategic adaptation to evolving global economic dynamics. With GDP growth projections ranging from 2.05% to 2.7%, Thailand faces a challenging year that demands prudent economic management and strategic foresight.
