Kasikornbank Research Center Raises Thailand's 2025 GDP Growth Forecast to 2% from 1.2%

Kasikornbank Research Center has raised its full-year 2025 economic forecast for Thailand to 2.0% from 1.2%, following stronger-than-expected first quarter performance and support from the 400-billion-baht emergency loan decree.

Thailand's economy in Q1 2025 expanded faster than anticipated at 2.8% year-on-year and 0.7% quarter-on-quarter, driven by both private and public investment as well as private and public consumption. These two factors contributed to Q1 GDP growth of 4.3%. Meanwhile, higher-than-expected exports and private investment were offset by robust imports, which surged 25.4% year-on-year.

The Thai economy also benefited from higher inventory levels compared to the same period last year, consistent with industrial production returning to positive growth in the first quarter and agricultural output increasing from the previous year due to favorable weather conditions.

Amid the impact of Middle East tensions, Kasikornbank Research Center had previously estimated Thailand's 2025 economy would expand within the range of 0.8–1.2% (forecast issued in April 2025) due to rising energy prices and a slowdown in tourism.

However, Q1 2025 GDP came in better than expected, combined with stronger-than-anticipated momentum in private investment and additional support from the 400-billion-baht emergency loan decree, prompting the research center to revise its 2025 GDP forecast upward to 2.0% from 1.2%.

Thailand's 2025 trade surplus is expected to decline from previous estimates and fall significantly compared to the previous year. Exports are projected to grow 8.2%, up from the previous forecast, supported primarily by electronics exports. However, this forecast accounts for risks from U.S. trade measures that may impose tariffs on Thai goods under Section 301 in the second half of 2025 onward.

Meanwhile, 2025 imports are expected to expand sharply to 13.9%, consistent with export growth and private investment expansion. Foreign tourist arrivals in 2025 are forecasted to fall to approximately 30 million from the previous estimate of 31.5 million, as elevated jet fuel prices continue to pressure global airlines' operating costs, leading to higher airfares and dampening tourist travel confidence, particularly among long-haul visitors.