Thailand's GDP Growth Upgraded To 2.3% On AI, Exports, State Measures
Thailand's central bank raised its 2025 economic growth forecast to 2.3%, citing strong AI-driven global demand and exports, though small businesses and agriculture remain under pressure from weak incomes and liquidity constraints.
The Bank of Thailand's Monetary Policy Committee has upgraded its 2025 economic growth forecast to 2.3% from 1.5%, with expectations of 1.8% growth in 2026, supported by exports, private investment, and government measures including energy relief and spending stimulus programs. Don Nakorntharp, the bank's assistant governor for monetary policy, cited lighter-than-expected impacts from Middle East conflicts and strong global growth driven by AI technology investments and energy transition initiatives as reasons for the improved outlook.
Despite the overall improvement, economic recovery remains uneven, with large businesses adapting well while small and medium enterprises struggle with liquidity constraints and weak purchasing power due to slow income growth, particularly in agriculture. High-growth sectors are limited to electronics, AI-related businesses, and industries directly benefiting from government measures.
Exports are forecast to grow 14% in 2025 before slowing to 4.6% in 2026, driven by global demand for technology products linked to AI and data center investments. However, about 85% of technology export value is concentrated among just 1% of exporters, and production relies heavily on imported components, limiting broader economic benefits.
Private consumption faces headwinds despite government stimulus, with household real income expected to contract 1.7% this year due to slow wage growth and agricultural challenges. Inflation is forecast at 2.8% for 2025, mainly from energy prices, before declining to 1.4% in 2026, with the central bank noting this cost-driven inflation differs from demand-driven pressures.
