Krungsri Economists Lower Thailand’s 2025 Economic Growth Forecast: Insight by Pimnara Hirankasi

In a surprising turn of events, Krungsri’s economic gurus have taken out their crystal balls, and with a Herculean sigh, adjusted their predictions for Thailand’s economic growth in 2025. Once expected to bask in a 2.7% growth rate, the forecast has taken a dip down to a modest 2.1%. This unexpected turn comes as swirling clouds of uncertainty gather from both directions: across the Pacific and right at home. With US trade policies playing hide and seek, combined with domestic conundrums adding to the pot of troubles, government policymakers are advised to navigate with the deftness of a tightrope walker.

Pimnara Hirankasi, no stranger to the economic labyrinth, and an executive with Bank of Ayudhya Public Company Limited, shed light on the mounting pressures poised to test Thailand’s economic resilience. It’s a rollercoaster out there, with the U.S. tossing and turning like an insomniac with its import tariffs, stirring up a whirlwind of unpredictability for our dear Thailand. Internal struggles also rear their heads with structural issues and a tourism recovery that seems to have hit a snag in the tracks, all hinting at simmering risks within the economic cauldron.

Krungsri’s decision didn’t arise from thin air; it was a nuanced calculation. They put three heavy-hitters on the scale: an earthquake in late March had its aftershocks rippling through the economy, Chinese tourists’ safety worries have thrown a wrench in the tourism engine, and the US’s trade policy uncertainties are like a tempest, casting shadows over investment and consumer confidence alike.

But hang on, it’s not entirely a path of despair. The cavalry, i.e., government spending combined with economic stimulus measures might just shake things up. With tourism expected to make a comeback—from 35.5 million up to 36.5 million tourists, strapping on their fanny packs ready to explore again—the potential for growth is still flickering. Nonetheless, international trade teeters on a see-saw of US policy decisions, bringing the suspense of a thriller novel to the mixing pot. On one particularly dramatic Wednesday, the US trade court surprised everyone by pausing counteractive tariffs like a soap opera with a cliffhanger ending. Still, whispers of President Trump potentially invoking the 1974 Trade Act to slap up to 15% import tariffs keeps exporters on their toes.

For Thai exports, the menu doesn’t look too appetizing either. By the year’s end, with the anticipation of a looming 10% US import tariff, the growth that once surged at an impressive pace could sullenly slow to 2%, dampening the spirits once high with double-digit enthusiasm seen in the year’s rosy first quarter.

As if balancing spinning plates, private consumption appears to be slowing to a trudge at 2.6%, under the weight of shaky consumer confidence, weary agricultural income, a household debt that could give any credit counselor a panic attack, and those pesky US tariffs casting a longer shadow on employment and income prospects. Investments are sending mixed signals like a moody teenager; while government investments flash promising signs with a potential rise of 5.8%, private investments are turning the other cheek, anticipating a shrinkage of 0.5%. Tourism’s sluggish recovery suggests service sector investments might play peek-a-boo a while longer.

Further ahead, Thailand’s future reads like a suspense novel. Navigating trade turbulence, political chess games, and domestic fiscal puzzles, all against a backdrop of an ageing population and manufacturing competitiveness sliding on a slippery slope. In such a scenario, the Bank of Thailand may decide to play the knight in shining armor, galloping in with lower policy interest rates to inject some life back into the economy.

Pimnara, brandishing a sharp economic foresight, warns that even though external perturbations are as common as rain in a Thai monsoon, internal pressures might squeeze Thailand’s economy more brutally than other players in the global arena. Hence, strategic policy-making combined with quick, resourceful responses is not just advisable, it’s essential to keep the ship afloat on these choppy seas.

And that’s the economic rollercoaster of Thailand for you. Hold tight, pay attention, because this ride is far from over.