Bangkok: Krungsri Research indicates that in 2025, both the Thai and global economies are expected to recover, driven by various factors including the easing of inflation and a boost in the tourism sector.
According to Thai News Agency, Krungsri Research predicts a global economic growth rate close to the previous year’s 3.3%, while the Thai economy is forecasted to grow by 2.7%, slightly better than 2024. The recovery is expected to be propelled by the tourism sector, with international tourist arrivals anticipated to reach 38 million, up from 35.5 million in 2024. This growth will be aided by increased demand and the expansion of flight routes, as well as the Visa Free measure.
Mrs. Pimnara Hirankasi, Head of Economic Research at Bank of Ayudhya Public Company Limited, noted that the easing of inflation will enhance purchasing power and enable major countries to reduce interest rates to foster economic growth and mitigate recession risks. However, several factors, such as high interest rates compared to historical averages, public and private sector debt, US economic policy uncertainties following Donald Trump’s re-election, and geopolitical tensions, may pressure economic growth.
For Thailand, temporary positive factors amidst domestic structural issues and global trends are expected to drive growth. Government spending is set to normalize after fiscal year 2024 delays, with a 4.2% increase in the fiscal year 2025 budget and a 4.5% GDP deficit. Private investment is projected to expand by 2.6%, supported by significant investment promotion applications worth over 1.1 trillion baht in 2024, signaling potential growth in target industries.
Exports, anticipated to grow by 2.7%, face restrictions due to potential intensifying trade barriers from US policy changes and domestic manufacturing sector issues affecting competitiveness. Private consumption is likely to slow, constrained by the sluggish recovery of real income, declining household asset values, and persistent household debt despite government relief measures.
The Thai business and industrial sectors are expected to gradually recover, driven by the modern service sector, high-tech industries, and infrastructure investment. However, challenges such as high household debt and trade tensions may impact exports. The ASEAN-5 economy is projected to expand by 4.6%, benefiting from domestic demand and foreign direct investment, though external risks remain, including rising trade tensions and the Global Minimum Tax’s impact on investment flows.
Krungsri Research reports that Thailand’s policy interest rate, reduced to 2.00% by the Monetary Policy Committee (MPC) in February, aligns with the economic outlook and is expected to remain unchanged for the rest of the year to support recovery. The average headline inflation rate in 2025 is projected to stay near the lower target range due to stable global crude oil prices and government measures to alleviate domestic energy costs.
Despite anticipated growth, the Thai economy in 2025 faces significant risks and challenges, including trade tensions, US policy uncertainties, geopolitical risks, an influx of Chinese imports, severe climate change, and structural issues like an aging society and high household debt.