BANGKOK — Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC), reported on May 19 that Thailand’s economy showed resilience in early 2025, with Gross Domestic Product (GDP) expanding by 3.1% in the first quarter. This follows a 3.3% expansion in the fourth quarter of 2024, indicating continued but slightly moderating growth momentum.
Despite this positive quarterly performance, the NESDC has maintained a cautious stance on the full-year outlook. Thailand’s economic growth for 2025 is projected to reach only 1.3-2.3%, with a median forecast of 1.8% – significantly lower than the current quarterly figures suggest.
Global Challenges Impact Growth Prospects
The tempered annual forecast reflects mounting international pressures facing the Thai economy. Danucha highlighted several external factors contributing to the uncertain outlook:
“Trade negotiations following recent U.S. tariff increases present significant challenges for our export sector,” Danucha explained. “Additionally, the ongoing slowdown of China’s economy – one of our largest trading partners – creates further headwinds for Thai businesses.”
The NESDC also expressed concern about heightened uncertainties in emerging market economies, which could further disrupt global trade patterns affecting Thailand.
Domestic Vulnerabilities Require Attention
On the home front, Thailand faces several structural challenges that could limit economic expansion. Household debt remains at concerning levels, with the NESDC warning that loan quality requires careful monitoring to prevent a rise in Non-Performing Loans (NPLs).
The agricultural sector, a significant employer and economic contributor, continues to face climate-related uncertainties. Unpredictable weather patterns could adversely affect crop yields and further strain agricultural income, according to the report.
“Both the business sector and the general public must adapt to cope with these changing situations more effectively,” Danucha advised, emphasizing the need for careful expense management across all sectors.
Six-Point Plan for Economic Management
To navigate these challenges, the NESDC has outlined six strategic approaches for the government to implement during the remainder of 2025:
- Accelerate Budget Disbursement: Focus on capital expenditure disbursement for fiscal year 2025 and carried-over budget at rates not less than 70% and 90% respectively, particularly for infrastructure projects. This should be paired with measures to enhance fiscal capacity to accommodate global economic uncertainties.
2. Address Trade Barriers: Conduct targeted trade and investment negotiations with the United States, reduce the trade surplus, promote exports of high-potential products, and expand into new markets. The NESDC also recommends accelerating FTA negotiations and attracting investments with emphasis on joint ventures and knowledge transfer.
3. Protect Domestic Production: Strengthen import inspection procedures, increase product standards and penalties, and crack down on smuggling. The council also advises investigating dumping and unfair trade measures while supporting affected entrepreneurs in accessing protective trade measures.
4. Support SMEs: Focus on revenue generation initiatives and enhancing production capacity for small and medium enterprises. This should be coupled with raising awareness of debt relief measures to enable struggling SMEs to successfully restructure their debt.
5. Bolster the Agricultural Sector: Prepare contingency measures for agricultural output fluctuations, support water management initiatives, rehabilitate water sources, and promote technology adoption to increase agricultural productivity.
6. Enhance Tourism Infrastructure: Build visitor confidence through improved safety measures, airport readiness, streamlined immigration services, better infrastructure, and enhanced environmental management.
“These focused interventions will be crucial for maintaining economic stability while navigating both domestic and international challenges in the months ahead,” Danucha concluded.
With careful implementation of these recommendations, the NESDC believes Thailand can weather current uncertainties while laying groundwork for more robust growth in future periods, despite the modest outlook for 2025.
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