Economic forecast for Thailand's GDP to be adjusted by NESDC following the U.S.'s affirmation of a 19% tariff on Thai exports.
The National Economic and Social Development Council (NESDC) has recently revised Thailand's GDP growth forecast for 2025, with the midpoint now set at 2.0%, within a range of 1.8% to 2.3%. This adjustment comes after a strong 2.8% GDP growth in the second quarter of the year and reflects a robust export performance, despite ongoing US tariff uncertainties.
The revised forecast is supported by several key points. Firstly, merchandise exports have seen a 15% increase in the first half of the year, driven by accelerated shipments to the US ahead of tariff hikes. It's worth noting that the US reciprocal tariff rate for Thai exports stands at 19%, slightly higher than the NESDC's initial expectation of 18%. However, this rate is broadly in line with those imposed on regional competitors.
Private consumption growth has slowed slightly, with a 2.1% increase in the second quarter compared to 2.5% in the first. Durable goods and vehicle purchases have been the main drivers of this segment. Investment has shown positive momentum, with private investment growing 4.1% in the second quarter, after a contraction in previous quarters. Public investment has also increased, though at a slower pace than in the first quarter.
Government consumption growth has eased but continues to support overall growth. The Fiscal Policy Office has revised its GDP forecast from 2.1% to 2.2%, aligning with the NESDC's revised midpoint. The tariff rate eases some pressure on the Thai economy, although it remains higher than initially expected.
Looking ahead, the Bank of Thailand has raised its GDP forecast to 2.3%. The NESDC has also emphasised six key priorities for steering Thailand's economy in 2025. Export figures for the first half of the year have exceeded earlier projections, further supporting the positive outlook for the Thai economy.
The International Monetary Fund projects Thailand's economy to expand by around 1.8% this year, with a likelihood of an upward revision. However, if trade negotiations with the United States fail, the Bank of Thailand warns that growth could be limited to just 1.3%. Despite these uncertainties, the revised GDP forecast for 2025 offers a promising outlook for Thailand's economy.
The revised GDP growth forecast for 2025, set at 2.0%, indicates a positive outlook for Thailand's economy, as stated by the National Economic and Social Development Council (NESDC). This improvement is credited to a surge in merchandise exports, which have seen a 15% increase in the first half of the year, facilitated by accelerated shipments to the US before tariff hikes. Furthermore, the international tourism sector may also contribute to this growth, as a prosperous economy often attracts more tourists.
