Thai economy seen growing 3% in 2025, finance ministry says

THAILAND’S economy is expected to grow 3 per cent this year, led by increased tourism, exports and private consumption, the finance ministry said on Thursday (Jan 30), unchanged from a previous forecast.

Exports, a key driver of Thai growth, were seen rising 4.4 per cent this year, stronger than an earlier forecast of 3.1 per cent, Pornchai Thiraveja, head of the finance ministry’s fiscal policy office, told a press conference.

South-east Asia’s second-largest economy is estimated to have expanded 2.5 per cent in 2024, compared with the 2.7 per cent growth projected earlier, the ministry said.

Official gross domestic product data is due on Feb 17.

“Growth last year was revised downwards due to a larger than expected fall in industrial investment from contraction in the auto sector,” Pornchai said.

Thailand is an auto production and export hub and home to regional operations of Japanese carmakers Toyota and Honda. But domestic sales hit a 15-year low due to tightening credit conditions and slow exports have dampened the industry with production reaching a four-year low in 2024.

A transition to electric vehicles dominated by Chinese EV companies also threatened the auto parts supply chain.

Private investment was seen growing 2.7 per cent this year, reversing from a fall of 2.7 per cent in 2024, ministry data showed, while private consumption was forecast to grow 3.3 per cent this year, from 4.7 per cent a year earlier.

“Growth can reach 3.5 per cent from the base of 3.0 per cent if we push,” Pornchai, adding that accelerated government spending would also support growth.

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Tourism is also a key engine of growth and the ministry projects 38.5 million foreign visitors this year, compared with the 39 million projected earlier, close to the record of nearly 40 million visitors set in 2019, before the pandemic.

“We have to closely monitor the concerns of Chinese tourists,” Pornchai said.

Thailand rushed to reassure Chinese tourists after questions about their safety were triggered earlier this month after actor Wang Xing went missing on the Thai-Myanmar border. Authorities said he may have been a victim of human trafficking by criminal groups.

China is the largest source for Thailand’s tourism industry, accounting for nearly a fifth of arrivals in 2024.

Last year, there were 35.5 million foreign tourists, up 26.3 per cent year on year.

The ministry predicts headline inflation at 0.9 per cent this year, compared with a previous forecast of 1 per cent, inside the central bank’s target range of 1 to 3 per cent. REUTERS