Thailand Q2 GDP Grows 1.9%, Trade Deficit Widens
Thailand's economy grew 1.9% in Q2 2025, slowing from the previous quarter, as energy prices and weak tourism offset gains from AI-related exports and government stimulus programs. The country posted its widest trade deficit since 1992 as c
HSBC estimates Thai economy expanded 1.9% in the second quarter of 2025 compared to the same period last year, a slowdown from the first quarter's 2.8% growth but slightly better than market forecasts. HSBC had predicted 2.1% growth while Bloomberg forecast 1.8%. When adjusted for seasonal factors, the economy contracted 0.2% quarter-on-quarter after a 0.6% expansion in the first quarter, reflecting mid-year economic slowdown. However, data centre investments, government stimulus, and inventory accumulation remained key growth drivers.
Senior economist Aris Dacanay of HSBC's ASEAN region noted the slowdown was driven by energy price pressures and tourism sector weakness. Rising fuel prices reduced household purchasing power, while foreign tourist arrivals declined partly due to high airfares. These headwinds were partially offset by government stimulus programmes, particularly the Thailand Helps Thailand Plus scheme, which subsidises 60% of purchases at participating retailers with a combined budget of 175 billion baht through September 2025.
Strong global demand for artificial intelligence technology boosted Thai exports in double-digit growth, as Thailand serves as a manufacturing hub for AI-related hardware including cooling systems, printed circuit boards, and hard disc drives. Despite export benefits from AI demand, capital imports jumped 27.5% year-on-year as Thailand accelerated imports of capital goods and advanced technology to support data centre construction and expansion.
The trade balance swung into deficit of approximately 509 billion baht, the widest deficit since 1992, the first year of available records. While some stems from rising oil import costs, HSBC believes the trade shift reflects structural changes as Thailand invests heavily to boost digital processing capacity and support the digital economy.
For full-year 2025, HSBC forecasts Thai GDP growth of 2.2%, supported by fiscal measures and strong exports, with potential acceleration in the second half. Inventory accumulation contributed 7.2 percentage points to GDP growth.
