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International trade

Thailand's Economic Growth Forecast Downgraded to 1.7% in 2025

Strategic Insights

— 1 min read

KKP Research by Kiatnakin Phatra Financial Group has revised down the country's GDP growth forecast to 1.7% in 2025, citing structural problems that have been building up over time. The revision is attributed to the impact of US trade policies, the slowdown in the global economy, and uncertainty surrounding global trade policies. Analysts have consistently overestimated Thailand's economic growth, reflecting structural factors that do not recover on their own over time.

Key Takeaways:

  • The Thai economy's slowdown is not solely due to Trump's tax policies, but rather structural problems that have been building up over time.
  • The tourism sector, which drove the economy after COVID-19, may slow down in 2025, along with the industrial and agricultural sectors.
  • KKP Research estimates that Thailand's GDP in 2025 could drop to as low as 0.9% if negotiations fail and the US resumes tariffs at 36% after the 90-day grace period.
  • The government must implement comprehensive economic stimulus policies, including both demand-side and structural policies, to address the country's economic slowdown.
  • Household debt and the decline of globalization are contributing to the weaknesses in Thailand's domestic economy.
  • Structural reforms are necessary to change the direction of the economy, which cannot be achieved through monetary or fiscal policies alone.

Statistics:

  • GDP growth forecast downgraded to 1.7% in 2025 (KKP Research)
  • Previous GDP growth estimate was 2.3% in 2025 (KKP Research)
  • US import tariffs may drop to 10% if negotiations are successful (KKP Research)
  • Global economy is slowing down, with potential impact on Thailand's GDP (World Economic Outlook)
  • Thailand's household debt ratio is high, contributing to domestic economy weakness (KKP Research estimate)
  • Globalization has peaked, leaving Thailand without a driving force in the economy (KKP Research observation)

Sources:

  • Thai News Agency (16 May 2025)
  • KKP Research, Kiatnakin Phatra Financial Group

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