Thailand’s economy likely slowed in the first quarter of 2025, held back by weak private investment, softer household spending, and a dip in tourism, according to a Reuters survey of economists.
The country’s gross domestic product (GDP) was projected to grow 2.9% year-on-year in the January to March period, based on a poll conducted from May 8 to 14. The survey included 20 economists, with forecasts ranging from 2.2% to 3.8%.
This marks a slight drop from the 3.2% growth recorded in the fourth quarter of 2024.
Official GDP figures are expected to be released by the Thai government on May 19.
Investment Confidence Falls, Tourism Declines
Economists pointed to weak domestic demand and fewer tourist arrivals, especially from China, as key factors behind the slowdown. However, these were partly balanced by stronger exports and increased government spending, according to a recent report from the Bank of Thailand.
Private investment, which declined by 1.6% in 2024, continued to be a weak spot in the first quarter. “Private investment could be a drag on the economy because many businesses seem to have falling confidence,” said Poon Panichpibool, a market strategist at Krung Thai Bank.
On a quarter-on-quarter basis, GDP was estimated to have grown by 0.6% after seasonal adjustments. This would be slightly faster than the 0.4% growth seen in the final quarter of 2024.
Exports and Consumption Still Growing
Despite the challenges, exports remained a key growth driver. They had been rising at double-digit rates earlier this year, as companies rushed to ship goods before new tariffs took effect. Private consumption was also expected to show steady gains, though not enough to offset the drag from investment and tourism.
Thailand faces U.S. tariffs of up to 36% on some exports. However, Thai officials have said that trade talks with Washington are progressing positively. A deal could lead to a lower, uniform 10% tariff—similar to those agreed by competitors like Vietnam.
“Thailand is likely to reach a deal that aligns with a universal 10% tariff. This would limit the disadvantage for Thai exporters,” said Amonthep Chawla, head of research at CIMB Thai Bank.
Growth Outlook for 2025 Cut
In a sign of growing caution, economists have lowered their outlook for full-year growth. A separate April survey showed the average forecast for 2025 GDP growth was revised down to 2.1%, from 2.9% in January.
That forecast is slightly higher than the Bank of Thailand’s projection of 2.0%, and above the International Monetary Fund’s more cautious estimate of 1.8%, issued in May.
To support the economy, the central bank has taken steps to ease monetary policy. Last month, it cut its key interest rate by 25 basis points—the second such cut in a row.
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