World Bank Cuts Thai GDP Forecasts to 1.8% in 2025

Thailand’s GDP advanced 2.8% yoy in Q1 2026, accelerating from 2.5% in Q4 and surpassing market forecasts of 2.2%. It marked the strongest growth since Q3 2025, mainly driven by faster increases in government spending (3.4% vs 1.3% in Q4), due to higher purchases of goods and services and social transfers in kind, as well as fixed investment (9.9% vs 8.1%). On the trade front, both exports (12.6% vs 5.6%) and imports (21.1% vs 9.5%) accelerated sharply. Meanwhile, private consumption growth eased slightly (3.2% vs 3.3%). By production, non-agricultural activity quickened (3.0% vs 2.7% in Q4), driven by expansions in the industrial sector (1.8%) and services sector (3.6%), led by mining, quarrying, and construction. Meanwhile, agriculture also accelerated (1.2% vs 0.6%), primarily due to higher yields of sugarcane, rubber, oil palm, maize, fruits, and broiler production. The government maintained its GDP forecast for this year in the 1.5%–2.5% range, with exports expected to rise 9.6%.

Thailand’s GDP expanded 2.5% yoy in Q4 2025, accelerating from Q3's four-year low of 1.2% and topping market forecasts of 1%. Private consumption rose the most in a year (3.3% vs 2.5% in Q3), supported by ongoing Bangkok's support measures. At the same time, government spending increased 1.3%, after falling 3.9% previously. Meanwhile, fixed investment picked up sharply (8.1% vs 1.4%). On the trade front, exports slowed (5.6% vs 7.6%) while imports accelerated (9.1% vs 5.9%). By production, non-agriculture quickened (2.7% vs 1.2%), with industrial output rebounding amid growth in mining and manufacturing. Also, services activity quickened, led by construction, wholesale and retail trade, financials, and transport. Meanwhile, the agriculture eased (0.3% vs 2.1%), reflecting a slowdown in agriculture, forestry, and fishing. The economy is expected to grow between 1.5% to 2.5% this year.

Thailand’s Finance Ministry expects the economy to grow by 2.2% in 2025, slower than an earlier estimate of 2.4% and easing from 2.5% in 2024, due to moderating exports and domestic demand, said Vinit Visessuvanapoom, head of the ministry’s Fiscal Policy Office, at a press conference, according to Reuters. Meanwhile, GDP growth is forecast to remain at 2.0% this year, with exports expected to rise 1.0%, compared with an earlier forecast of a 1.5% decline. The central bank has forecast economic growth of 1.5% in 2026. Thailand’s economy has been struggling with US tariffs, an appreciating baht, high household debt, border tensions with Cambodia, and political uncertainty ahead of elections in early February. The baht has gained about 1.4% against the dollar so far this year, following a 9% rise in 2025, threatening the competitiveness of the export and tourism sectors.