BANGKOK- Thailand’s economy is expected to grow 2.9 percent this year, the World Bank said on Friday, down slightly from 3.0 percent projected in October but still accelerating from 2.6 percent estimated for 2024.
Growth in Southeast Asia’s second-largest economy will be driven by a rebound in investment, supported by higher budget execution and implementation of pipeline infrastructure projects, while tourism and private consumption will remain key but slowing drivers, the World Bank said in a report.
Tourism is projected to return to pre-pandemic levels by mid-year, with 41 million visitors for 2025, surpassing the record of nearly 40 million in 2019.
Private consumption will be supported by fiscal stimulus, including cash transfer measures, but the deleveraging cycle and stricter lending by commercial banks will slow consumption further, the report said.
Goods export growth is expected to moderate this year due to softer demand from key trading partners, including the United States and China, the bank said.
The World Bank said global trade policy uncertainty posed a significant threat given Thailand’s openness to trade and participation in global value chains.
Thailand’s monetary stance is expected to remain cautiously accommodative this year, the World Bank said.
“While a cautiously accommodative monetary stance is appropriate to support the recovery, providing targeted household debt relief while minimizing credit tightening and maintaining financial stability remains a priority,” it said.
The Bank of Thailand left its key interest rate unchanged at 2.25 percent in December after a surprise cut in October. Its governor told Reuters last month the current rate level was appropriate. The BOT will next review monetary policy on February 26.
Thailand’s growth is projected to slow to 2.7 percent in 2026, the World Bank said, adding structural reforms on competitiveness could boost long-term growth. It said potential growth was estimated at around 2.7 percent annually, 0.5 percentage points lower than the previous decade.
Thailand’s weak growth prospects, high household debt, and reliance on consumption underscore the urgent need to boost investment and empower small and medium-sized businesses and startups, it said.
Meanwhile, Thailand’s economy likely grew at its fastest pace in over two years last quarter, driven by a surge in foreign tourists and strong exports that helped offset sluggish domestic demand, a Reuters poll of economists found.
While household consumption is expected to remain under pressure despite the government’s cash handout to stimulate demand, exports and a steady flow of tourists during the holiday season probably helped growth.
