NationThailand-Feb 18
Thailand, once a roaring Asian tiger economy, finds itself at a critical crossroads as it grapples with persistently sluggish growth that threatens to relegate it to the slow lane of Southeast Asian development. With projected growth of just 2.8% for 2025, the kingdom faces mounting pressure to address structural challenges that have dampened its economic dynamism. The National Economic and Social Development Council (NESDC) projects Thailand’s economy will expand by 2.3-3.3% in 2025, with a median forecast of 2.8%.
While the Fiscal Policy Office (FPO) maintains a slightly more optimistic outlook of 3.0%, these figures stand in stark contrast to the robust growth of Thailand’s regional neighbors. Vietnam, the region’s rising star, anticipates 6.6% growth in 2025, following a strong 6.4% expansion in 2024. The Philippines expects 6.2% growth, while Cambodia maintains a steady 6% trajectory. This disparity highlights Thailand’s increasing challenge in maintaining its competitive edge within Southeast Asia. The kingdom faces a complex web of domestic challenges that have created significant headwinds for economic revival.
Household debt has surged beyond 90% of GDP, severely constraining consumer spending power. The situation is further complicated by hidden unemployment, widening income inequality, and declining private investment—a telling indicator of wavering confidence in the country’s economic prospects. Private investment contracted by 1.6% in 2024, despite government efforts to stimulate the economy through increased public spending. This stands in marked contrast to Vietnam’s success in attracting foreign direct investment (FDI), securing over 369.7 billion baht in the first half of 2024 alone, primarily in electronics and semiconductor sectors. While Thai exports showed signs of recovery with 5.8% growth in 2024, forecasts suggest a slowdown to 3.5% in 2025 amid global market uncertainties. This modest performance pales in comparison to Vietnam’s thriving export-oriented manufacturing sector, highlighting Thailand’s challenge in maintaining its competitive position in global markets. Despite these concerns, Thailand maintains several economic strengths. Inflation remains under control, expected to stay between 0.5% and 1.5% in 2025, following a modest 0.4% in 2024. The current account continues to show resilience, with a projected surplus of 2.5% of GDP in 2025, up from 2.3% in 2024. Read more at:
