Thailand’s economy expanded by 2.8 percent year-on-year (YoY) in the second quarter of 2025, according to the Office of the National Economic and Social Development Council (NESDC).
The latest figures marked a slowdown from 3.2 percent YoY growth in Q1, reflecting weaker domestic demand and external pressures.
On a seasonally adjusted quarter-on-quarter basis, Thailand’s GDP rose 0.6 percent. For the first half of 2025, the economy grew by 3 percent.
Read: Germany’s economy contracts 0.3 percent in Q2 2025 as U.S. demand slows
Expenditure-side highlights
Exports of goods remained a key driver, expanding 15 percent, supported by front-loaded shipments ahead of the expiry of U.S. Reciprocal Tariffs suspension. Key exports included computers, machinery, integrated circuits, and vehicle parts.
Private consumption rose 2.1 percent in Q2, slowing from 2.5 percent in Q1, mainly due to softer spending on services. However, spending on durable goods surged 6.1 percent, led by vehicle purchases.
Government consumption in Q2 grew by 2.2 percent, down from 3.4 percent in Q1, amid weaker spending on salaries, goods, and services.
Total investment increased 5.8 in the second quarter of the year. Notably, private investment grew 4.1 percent, marking its first expansion in five quarters. Public investment rose 10.1 percent, driven by a 16.1 percent increase in construction, though slower than Q1’s 26.3 percent performance.
The Southeast Asian country’s imports rose 16.8 percent, resulting in a $5.3 billion trade surplus — down from $8.2 billion in Q1.
Production-side performance
Thailand’s manufacturing sector grew 1.7 percent, supported by export-oriented industries. Wholesale and retail trade expanded 6.2 percent, driven by industrial output and auto sales. Agriculture grew 6 percent, but a 6.6 percent drop in farm income occurred due to falling prices.
Accommodation and food services recorded a 2.1 percent growth in Q2, compared with 7.2 percent in Q1, linked to a decrease in tourist arrivals. Construction sector grew 8 percent, supported by public projects. However, private construction continued its decline for a fifth straight quarter. Transportation and storage grew 4 percent, down from 5.4 percent in Q1.
Economic stability indicators
Unemployment edged up slightly to 0.91 percent in Q2, compared with 0.89 percent in the previous quarter. Headline inflation fell to -0.3 percent, the first negative reading in five quarters, while core inflation stood at 1 percent. Current account surplus in Q1 stood at $527.66 million, while international reserves totaled $262.4 billion at the end of June.
Outlook for 2025
Thailand’s economy is now projected to grow between 1.8 percent and 2.3 percent in 2025, with a midpoint forecast of 2 percent, down from 2.5 percent in 2024. The revised outlook reflects heightened risks from U.S. tariff measures, sluggish tourism, and weaker manufacturing.
Key risk factors
Slowing export volumes in H2 2025 due to U.S. trade restrictions
- Softening manufacturing sector
- Tourism recovery losing momentum
- Persistent high household and corporate debt
- Volatile agricultural prices and global economic uncertainties
Supporting growth drivers
- Rising public investment
- Modest but sustained domestic consumption
- Rebound in private investment
- Sector-specific forecasts
Consumption
Private consumption is forecast to grow 2.1 percent, down from 4.4 percent in 2024, impacted by weak tourism revenue and lower farm income. Government consumption is expected to rise 1.2 percent, in line with previous estimates.
Investment
Total investment is projected to grow 2.1 percent, recovering from a flat performance in 2024. Private investment is forecast at 1 percent growth, while public investment is expected to rise 5.2 percent.
Exports
The export value of goods is projected to grow 5.5 percent, an upward revision due to strong H1 performance. However, H2 faces downside risks from global economic pressures and U.S. trade policy.
Inflation forecasts
Headline inflation is expected to range between zero and 0.5 percent. Current account surplus is forecast at 2.1 percent of GDP.
Economic management priorities
The government is pursuing targeted policies to cushion the economy against external and internal challenges:
- Mitigating trade impacts
- Diversifying export markets
- Improving compliance with international trade standards
- Addressing dumping practices
- Driving private investment
- Fast-tracking investment approvals
- Revising incentive structures
- Enhancing infrastructure and industrial ecosystems
- Supporting tourism recovery
- Improving tourist safety and experience
- Promoting high-spending tourism segments
- Organizing events and campaigns to boost arrivals
- Providing financial assistance
- Offering soft loans and debt restructuring to SMEs
- Enhancing SME competitiveness and innovation
- Expediting budget disbursement
- Accelerating capital budget disbursement under FY2025 to stimulate economic activity
- Supporting agriculture
- Implementing strategic marketing plans
- Addressing climate-related disruptions
- Promoting crop insurance and sustainability measures
Thailand’s economy continues to face considerable headwinds from global trade disruptions, tourism uncertainties, and structural debt issues. Nonetheless, with coordinated efforts in investment, trade diversification, tourism promotion, and agricultural support, the government aims to maintain a stable growth trajectory.
The projected GDP growth range of 1.8 percent – 2.3 percent in 2025 highlights cautious optimism amid a complex global economic environment.
