Thailand’s Q2 Growth Beats Forecasts but Slowdown Expected
Thailand’s economy grew faster than expected in the second quarter thanks to strong export growth ahead of U.S. tariffs, the state planning agency said on Monday. However, momentum is likely to weaken over the rest of the year.
GDP Performance in Q2
Southeast Asia’s second-largest economy expanded 2.8% year-on-year in April–June, the National Economic and Social Development Council (NESDC) reported. The figure beat a Reuters poll forecast of 2.5%, though it was below the 3.2% growth seen in Q1.
For the first half of 2025, growth averaged 3% annually. The NESDC revised its full-year forecast to between 1.8% and 2.3%, up from its earlier estimate of 1.3% to 2.3%.
Exports and Tariff Impact
Council chief Danucha Pichayanan said exports and manufacturing had improved, supported by clarity on reciprocal tariffs. He added that Thailand’s economy should expand more than earlier projections suggested.
The United States has set a 19% tariff on Thai imports, similar to other regional peers. Danucha noted growth in the rest of the year “should be good but lower than the past two quarters.”
Last year, Thailand’s 2.5% growth lagged behind regional economies.
Export Forecast Revised Higher
The council raised its 2025 export growth forecast to 5.5% from 1.8%, after a strong 15% year-on-year increase in the first half. The surge was driven by exporters rushing to ship goods before tariffs take full effect. However, shipments are expected to slow in H2.
The United States was Thailand’s largest export market in 2024, accounting for 18.3% of total exports worth $55 billion. Uncertainty remains about tariffs on goods transshipped through Thailand from third countries.
Risks to Economic Growth
Kasikornbank’s Kobsidthi Silpachai predicted Thailand’s final 2025 growth rate could fall to 1.5%. He said momentum from front-loaded exports will fade, while weaker tourism and high household debt will weigh on the economy.
The NESDC also cut its 2025 foreign tourist arrival forecast by 10% to 33 million visitors.
Fiscal and Monetary Policy Support
Parliament approved a 3.78 trillion baht ($116.6 billion) budget for fiscal 2026, starting October 1. The spending is expected to stimulate economic activity.
Meanwhile, the Bank of Thailand cut its key policy rate by 25 basis points to 1.50%, a near three-year low. Further monetary easing is expected later this year.
($1 = 32.42 baht)
