World Bank projects 2.9% growth for Thai economy in 2025

Recovery in investment and tourism leads to upward revision from the earlier forecast of 2.6%

 

The World Bank has revised its growth forecast for Thailand's economy, projecting a 2.9% expansion in 2025, up from 2.6% in 2024, according to its latest Thailand Economic Monitor report released on Friday.


The improved outlook is primarily driven by recovering investment, supported by increased budget disbursement and ongoing infrastructure project implementation. 


Tourism sector recovery and private consumption continue to play vital roles, with tourist arrivals expected to return to pre-pandemic levels by mid-2025.


As Thailand navigates global economic shifts, innovation, entrepreneurship, and dynamic small and medium-sized enterprises (SMEs) are poised to strengthen economic resilience and foster sustainable growth.


Melinda Good, World Bank country director for Thailand and Myanmar, highlighted Thailand's remarkable progress over the past five decades. 



"Unlocking future growth potential requires bold decision-making, investment in innovation ecosystems, future-ready skills development, and a conducive regulatory environment that will enable Thai people to adapt to global challenges and grow sustainably," she said.
 

The continuous economic recovery, coupled with the government's 10,000-baht cash handout programme, has contributed to a reduction in the poverty rate from 8.5% in 2023 to 8.2% in 2024. However, despite better-than-expected recovery, Thailand's GDP remains below its potential level.


Key challenges include reducing high household debt levels, stimulating private investment, and ensuring fiscal sustainability amidst increasing expenditure demands driven by climate change and an ageing society.


The report emphasises that small and medium-sized enterprises (SMEs), which account for over 90% of businesses in Thailand and serve as a crucial source of employment, could become powerful growth drivers. However, these enterprises, along with startups, continue to face obstacles in accessing funding, technology, and international markets. 

Kiatipong Ariyapruchya, senior economist at the World Bank Thailand, stressed the importance of strengthening fiscal resilience through improved revenue collection efficiency and targeted budget spending. 


"Expanding the tax base and prioritising growth-enhancing investments in infrastructure and new technologies will be crucial for long-term sustainability", he noted.


The World Bank forecasts tourist arrivals to reach 41 million in 2025, surpassing the pre-pandemic record of nearly 40 million visitors in 2019. 


While private consumption will benefit from economic stimulus measures, including cash handouts, household deleveraging and tighter bank lending conditions are expected to moderate consumption growth.


Export growth is projected to slow due to reduced demand from key trading partners, including the United States and China. The World Bank noted that global trade policy uncertainties pose significant risks, given Thailand's open economy and integration into the global value chains.


The report suggests that Thailand's monetary policy stance will remain cautiously accommodative this year. 


"While a cautiously accommodative monetary stance is appropriate to support economic recovery, targeted household debt relief whilst minimising credit tightening and maintaining financial stability remains crucial," the World Bank concluded.

(2025/02/14-00:00)