Thai GDP at Risk of Low Growth Amid Mounting Domestic and Global Challenges

Thailand’s economy in 2025 is facing risks from multiple directions, both domestic and international. Recently, the University of the Thai Chamber of Commerce revised its economic growth forecast (GDP) down to just 1.7%, from the previously expected 3%.

Professor Dr. Thanavath, President of the University of the Thai Chamber of Commerce, stated that this year, Thailand’s economy is being pressured by negative factors such as the global economic situation—particularly the Iran-Israel conflict and trade protectionism from the U.S., including potential tariff hikes on Thai imports. Domestically, the economy is burdened by political uncertainty, tensions along the Thai-Cambodian border, and the fragile stability of the current government.

On the ground, the real economy is recovering more slowly than expected. The industrial sector is operating at only 65.1% capacity. Private investment has continued to contract for a fourth consecutive quarter. Exports are likely to slow down in the second half of the year, as the U.S. had already front-loaded its imports earlier in the year. Meanwhile, the number of international tourists is declining, and household debt relative to GDP may rise to 87.4%.

Although the revised 1.7% growth projection still falls within the “not severely negative” scenario, it hinges on several conditions—such as U.S. tariffs remaining moderate, geopolitical tensions easing, and the government completing its term with budget disbursement of no less than 50%, and export growth reaching 2.5%.

Conversely, in a worst-case scenario—such as the dissolution of parliament, a government without stability, the U.S. imposing tariffs as high as 30%, or a year-long closure of the Thai-Cambodian border—Thailand’s economy may grow by only 0.9%.

On the other hand, if all situations improve positively—such as the Prime Minister continuing to govern effectively, U.S. tariffs capped at 10%, and budget disbursement reaching 75%—GDP growth could rise to 2.3%.

To stabilize the economy and minimize volatility, the government should urgently pursue trade negotiations with the U.S., accelerate budget spending, unlock credit access (especially for housing and auto loans), implement measures to tackle household debt, and create new incentives to stimulate private sector investment.

Thailand’s economic outlook for 2025 remains uncertain and highly volatile, depending on how effectively the government handles the challenges and how external risks evolve.