Concerning Signs! Thailand’s GDP Growth is the Slowest, Tourism is No Longer as Strong

Concerning Signs Thailand’s GDP Right now, Thailand’s economy isn’t doing well, growing at the slowest pace in the region. While tourism still supports the economy, it’s starting to slow down.

In 2024, Thailand’s economy is expected to grow by just 2.5%, following last year’s growth of 2.0%. The final quarter of the previous year showed only a 0.4% growth compared to the previous quarter. The main factor dragging the economy is the slowdown in the industrial sector, especially the automobile industry, which saw a 21% reduction in production. Although exports are still performing well, they have not been able to drive significant economic growth.

For 2025, the economy is expected to grow by 2.3% to 3.3%, with the government aiming for 3%. Whether this target will be met depends on how effective the economic stimulus measures are in boosting the economy.

Government Economic Stimulus Measures:
Should the Policy Interest Rate Be Reduced?
Risks to Watch:
Tourism Slows Down
Thailand's Economy Grows the Slowest in ASEAN

Government Economic Stimulus Measures:

Speeding up the disbursement of the budget to put more money into the system.
Stimulating private sector investment, which is expected to grow by 3.2% this year, after being negative last year.
Injecting 157 billion baht to stimulate the economy in the early part of the year.
Proposing investments in small water projects across the country to help with flooding and droughts, while also boosting the pickup truck market.

Should the Policy Interest Rate Be Reduced?

There’s a debate about whether Thailand should lower its interest rate to boost the economy. If the Bank of Thailand cuts rates but the U.S. raises theirs, the baht might weaken. A weaker baht could help exports and tourism but also make energy imports more expensive. Some economists think Thailand should lower interest rates in the first half of 2025 to help the economy before things get worse.

Risks to Watch:

Trump’s policies could affect global trade and impact Thailand’s economy.
High household debt is reducing the purchasing power of the population.
SMEs are facing increasing competition, especially from China.
Thailand’s economy is growing unevenly, with provinces dependent on tourism seeing growth, while others are still not recovering as expected.

Tourism Slows Down

In 2024, Thailand welcomed 39 million tourists, up from 35.5 million the previous year. However, growth this year may not be strong unless the government takes action to help the economy.

Thailand's Economy Grows the Slowest in ASEAN

While Thailand’s GDP is expected to grow by 2.8%, as predicted, it remains the slowest-growing economy in ASEAN compared to other countries. The main issue causing slow growth is the aging population and low productivity.

Thailand’s economy is still growing, but at a slow pace. If the government wants to reach the 3% target, it must speed up investments, stimulate purchasing power, and manage interest rates appropriately, as there are still many risks this year.