Thailand’s economy has not yet reached a critical level, but is experiencing prolonged and slow K-shaped growth, an economic pattern in which some sectors experience growth while others stagnate or decline, thanks to the long-term impacts of the current US administration’s reciprocal tariffs imposed on all of their trading partners, including Thailand, according to Dr. Kirida Bhaopichitr, director of international economic policy and development at the Thailand Development Research Institute (TDRI).
She pointed out that such a gloomy economic outlook is not limited to Thailand, but is being experienced globally, making it vital for all businesses to adapt to survive. She said that, when a company decides to relocate its production base, it must be sure that it will remain in its new location for 10-20 years.
Thailand’s export growth for the first half of this year was 14%, largely due to the acceleration of exports to the US ahead of the increased tariffs.
She noted, however, that the export projection for the whole year will drop to just about 1%, which will impact the Thai economy and the purchasing power of consumers.
Even though inflation is under 1%, oil prices have a tendency to fall further and the central bank has cut its policy rate to 1.5%, with the likelihood of further cuts to about 1% next year, commercial banks are still reluctant to make borrowing any easier.
Public debt remains high, at 90% of GDP, although this dropped slightly during the first three quarters of the 2025 fiscal year, while the tourism sector, one of the main engines of growth, is slowing with fewer foreign arrivals.
Dr. Kirida said it will take several more years before arrivals reach 40 million annually.
The growth rate for this year is projected at between 1.5-2%, with 1.7-1.8% next year, she said.
