Thai growth forecast receives upgrade
According to Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), the council now projects GDP growth in a range of 1.8–2.3%, with a midpoint of 2%. This revision raises the lower bound of the previous forecast range of 1.3–2.3% (announced on May 19), which had a midpoint of 1.8%.
He explained that the clearer outlook on reciprocal tariffs -- with Thailand receiving a 19% rate, similar to the regional average -- has benefited the country's export sector. Export value in US dollars for the full year is now expected to expand by 5.5%, higher than the 1.8% growth projected on May 19. This export recovery is expected to positively impact manufacturing and private investment. Private investment this year is now forecast to grow by 1%, compared to the earlier projection of a 0.7% contraction on May 19, and improving from last year's 1.6% contraction.
As for foreign tourist arrivals, the NESDC has revised down its forecast to 33 million for this year, from 37 million projected on May 19, citing a sharp 12.2% decline in arrivals in the second quarter. A major factor is the lower-than-expected number of Chinese tourists, now estimated at only 4 million this year, compared to the earlier forecast of 6 million.
However, average tourist spending per person per trip is expected to rise to 47,000–48,000 baht, up from 42,000 baht last year. As a result, tourism revenue is projected at 1.57 trillion baht, down from 1.71 trillion baht forecast in May.
According to Mr Danucha, global GDP growth this year is expected at 3%, better than the previous forecast of 2.6%. The US is projected to grow by 1.8%, China by 4.6%, and global trade volume is expected to expand by 2.7%, up from the previous 1.8% forecast.
For the second quarter of this year, Mr Danucha on Monday reported that the Thai economy grew 2.8% year-on-year. Seasonally adjusted GDP rose 0.6% from the first quarter. However, the growth in the second quarter was lower than the 3.2% in the first quarter, due mainly to a slowdown in tourism-related services. GDP in the third quarter is expected to come in below the first two quarters, he said.
Mr Danucha said that to accelerate economic growth for the remainder of the year, it was essential for the responsible parties to focus on measures to mitigate the impact of US tariffs and the retaliatory actions of key trading partners, to support the recovery of the tourism sector and related services, to drive private investment, and to provide financial assistance to businesses, particularly SMEs, that face difficulties in accessing liquidity and are further affected by trade restriction measures.
The government is also being urged to expedite budget disbursement to promptly inject government spending into the economy and support agricultural production and farmers' income.
He noted that Thailand's economy is expanding below its potential growth rate of 3% due to structural problems. New industries must be persuaded to invest in Thailand to strengthen exports -- a process expected to take 2–3 years.
In terms of economic stability, the NESDC on Monday reported that the unemployment rate stood at 0.91% in the second quarter, slightly higher than 0.89% in the previous quarter but lower than 1.07% in the same quarter of the previous year.
Headline inflation turned negative for the first time in five quarters, at -0.3%, while core inflation stood at 1%. The current account recorded a surplus of US$600 million or about 17.1 billion baht. At the end of June 2025, international reserves stood at $262.4 billion, and public debt amounted to 12 trillion baht, accounting for 64.2% of GDP.
DOWNBEAT ON H2 OUTLOOK
Pichai Lertsupongkit, chief commercial officer of InnovestX Securities, said second-quarter GDP is relatively in line with market forecasts of around 2.5-2.8%, thanks mainly to the frontloading effect ahead of Aug 7, when the US tariffs took effect.
Nonetheless, exports are likely to decelerate drastically in the second half, prompting the brokerage to believe that GDP will expand by just 0.4%. Consequently, GDP is expected to expand by less than 2% for the entire year.
While analysts will closely monitor Federal Reserve chair Jerome Powell's speech at the Jackson Hole Economic Policy Symposium late this week to digest the US central bank's monetary policy direction, Mr Pichai said Thai interest rates have been clearly on a downward trend.
The brokerage is now seeing the possibility that the Bank of Thailand's Monetary Policy Committee might slash rates again at its Oct 8 meeting, following the cut last week, he noted.
Poonyawat Sriesing, senior economist at SCB EIC, said the research arm of Siam Commercial Bank is finalising its GDP forecast for 2025, which is likely to be upgraded to 1-8-1.9%, from 1.5% in the July estimates.
However, risks are mounting in most economic indicators, especially exports, public investments, and tourism, he told the Bangkok Post.
"Exports are likely to see a decline from July onwards. We are projecting that overseas shipments contract by double digits in the fourth quarter," said Mr Poonyawat.
State investments are projected to slow down in the third and fourth quarters of the year, following the acceleration seen in the first two quarters, as limited funds are available.
Tourism, another major driver of the Thai economy, has also remained in the doldrums.
"We are also revising the estimates of overall international arrivals this year, now projecting at around 33 million, down from 35.5 million in 2024," Mr Poonyawat said.
SCB EIC expects the central bank to cut rates again in the fourth quarter, most likely in December, to shore up economic growth, he added.
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