Thai growth likely slowed in first quarter on weak investment and consumption

Reuters

15-05-2025

BENGALURU, May 15 (Reuters) - Economic growth in Thailand likely slowed in the first quarter, weighed down by subdued private investment, weaker household consumption and a drop in tourism, according to a Reuters poll of economists.
Southeast Asia's second-largest economy was forecast to expand 2.9% on average in the three months to March 31 from the same period a year earlier, the May 8–14 poll of 20 economists showed. Estimates ranged between 2.2% and 3.8%.
The economy grew 3.2% in the fourth quarter.
The government is scheduled to release the data on May 19.
Tepid domestic demand and softening tourist arrivals from China were partly cushioned by stronger exports and higher government spending, a Bank of Thailand, opens new tab report said late last month.
Private investment - which shrank 1.6%, opens new tab last year - was a drag on the economy in the previous quarter.
On a quarterly basis, gross domestic product (GDP) likely grew a seasonally adjusted 0.6%, slightly faster than the 0.4% increase in the quarter ended December 31, a smaller poll sample showed.
"Private investment could be a drag on the economy in the first quarter because a lot of businesses seem to have falling confidence," said Poon Panichpibool, a markets strategist at Krung Thai Bank.
Panichpibool said the main driver of first-quarter growth would still be exports, which had been expanding by double digits up until the past few months due to the rush to avoid tariffs. Private consumption would also continue to grow steadily.
Thailand faces tariffs of 36% on its exports to the U.S. although the government said it has received a positive response from Washington for a possible trade deal.
"Thailand is likely to reach a deal that aligns with a universal 10% tariff, similar to what competitors like Vietnam might agree to. This would limit the disadvantage to Thai exporters," said Amonthep Chawla, head of the research office at CIMB Thai Bank.
An April survey showed economists had lowered their 2025 growth forecast to 2.1%, from 2.9% in a January survey. That was above the Bank of Thailand's 2.0% projection in April and the International Monetary Fund's more conservative 1.8% forecast in May.
The central bank cut its key rate by 25 basis points for the second consecutive time last month to support the economy.