• Key policy rate: 2.0% (February 2025)
• Quarterly GDP growth rate: 2.5% (2024)
• 2025 GDP growth target: 2.8%
• Manufacturing Purchasing Managers’ Index reading: 50.6 (February 2025)
• Inflation rate: 1.08% (February 2025)

Thailand’s economy has been struggling to restore its pre-pandemic growth pace, with average annual expansion easing to 2 per cent between 2021 to 2023 while its Southeast Asian peers are racing ahead. Low productivity, coupled with high household debt and weak public investments, has constrained economic growth in recent years.

Consumer spending has decelerated for four straight quarters as of September 2024, and the Thai government is seeking to spur household consumption through cash handouts worth THB 10,000 (about USD 294) to 50 million residents. However, the dole outs have come at a time of a growing public sector burden. A recovery in tourism receipts and stronger private consumption would support faster GDP expansion, while reduced political uncertainty will support an increase in private sector investments. Thailand has had four prime ministers over the last four years, each one putting forward a different set of policy priorities.

Thailand enjoys a trade surplus, with rice and agricultural products seeing the fastest increase in recent quarters. Other major exports include electronics, food, and rubber.

By sector, the services industry accounts for two-thirds of Thailand’s GDP, led by the transportation and food and hospitality businesses, the latter being the fastest-growing segment. Industrial production contributes about 30 per cent of economic output, while about 5 per cent comes from agriculture.

House view: A boost in private domestic consumption through a cash stimulus package to households would bode well for Thailand’s economy in the short term. Lundgreen’s remain optimistic about Thailand’s growth prospects, which continues to outpace the growth of mature economies. The sustained recovery of the tourism sector will allow the Thai economy to return to its pre-pandemic annual growth levels ranging between 3-4 per cent and allow the public sector to manage its growing debt burden.

Updated as of 21 March 2025