Market

KKP Revises Thailand’s 2025 GDP Forecast to 1.7%, Citing Structural Economic Challenges


Bangkok: KKP has adjusted its 2025 GDP forecast for Thailand, lowering it to 1.7% from a previous estimate of 2.3%. The financial group attributes this adjustment to structural issues within Thailand’s economy, coupled with external factors such as US trade policies and a global economic slowdown, which have collectively influenced export dynamics and investment decisions.



According to Thai News Agency, KKP Research by Kiatnakin Phatra Financial Group highlights that the Thai economic slowdown isn’t merely a result of temporary factors. Analysts have often overestimated growth, failing to account for structural problems and heightened uncertainties that have led the economy to perform below expectations. KKP Research emphasizes that the structural issues are longstanding and not solely linked to recent US tax policies.



Post-COVID-19, Thailand’s economy has largely been buoyed by the tourism sector. However, since the end of 2022, other economic sectors have been contracting, with growth stabilizing around 0% in recent quarters. This stagnation suggests that sectors such as industry and domestic markets may be in recession, underscoring the inherent weaknesses within the economy.



Looking ahead to 2025, KKP Research anticipates simultaneous slowdowns in Thailand’s tourism, industry, and agriculture sectors. This suggests that the economic deceleration is not just due to US tax policies. They predict that even if US tariffs are re-imposed, Thailand’s GDP could fall to as low as 0.9% in 2025, with little chance of returning to a 3% growth rate even without these tariffs.



KKP Research has identified three critical observations: a lack of economic growth drivers from 2025 onwards, the long-term nature of the economic slowdown not linked solely to temporary factors like US taxes, and domestic weaknesses due to high household debt amid a decline in globalization.



To address these challenges, KKP Research advises that the Thai government implement coordinated and comprehensive economic policies. Structural reforms are essential, as relying solely on monetary or fiscal policies without addressing underlying issues will not pivot the economy towards growth.