Thailand has lost its last growth engine
Thailand has lost its last engine of growth and people are abandoning hope for a decent life.
The first half of the previous sentence is being well documented in the media after a sharp drop in the number of tourists coming to Thailand, with the situation likely to get worse when Donald Trump's tariff policy comes into full effect in July.
However, the second half of the sentence about the economic impacts of lower tourism income has not yet been analysed. Thailand has four growth engines: (1) Investment, (2) Consumption, (3) Exports, and (4) Tourism. Many agree the first three burned out some time ago, making Thai GDP growth one of the lowest in Asean.
The only force keeping the economy from plunging into a dark abyss is the last engine -- tourism -- which has been booming since the end of the Covid pandemic. Tourist numbers are now close to the pre-Covid level. It was projected the number of foreign tourists would increase by 7.5% this year, reaching 38.2 million visitors.
Without a booming tourism sector, the Thai economy would have had negative GDP growth both in 2023 and 2024. Unfortunately, things changed unexpectedly since February 2025.
The number of incoming tourists, which expanded 26.7% in 2024, shrunk 6.9%, 8.8% and 7.6% respectively from February to April. It was the first contraction in five years.
Disappointing tourism performance is the key factor that led to a 1.0% cut in GDP growth projections for 2025. The projected 2.8% GDP growth has now been lowered to 1.8% by the government's planning agency, the National Economic and Social Development Council (NESDC). Both the IMF and the World Bank agreed and both lowered 2025 GDP growth for Thailand to 1.8% and 1.6% respectively. A local research house is even more pessimistic, projecting a 1.4% GDP growth for this year.
https://www.bangkokpost.com/opinion/opi ... wth-engine
Major Economic Issues For Thailand
Re: Major Economic Issues For Thailand
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson
Re: Major Economic Issues For Thailand
Things are so bad here now that even Bloomberg has taken note ...
Thailand Is Languishing at Just the Wrong Moment
Deliberation is generally a sound attribute, but Thailand is discovering it also has costs. The country’s economic woes, magnified by the US trade war, have become too great to ignore.
This isn’t an acute crisis that’s bound to consume the neighborhood in the manner of the late 1990s financial collapse. It’s more of a slow-burning challenge that mixes uber-caution on interest rates at a local level with broader underlying regional trends of tepid price gains and slackening growth. Attention is warranted, nonetheless.
Recession threatens and inflation, already microscopic when Donald Trump returned to the White House, is heading south. Even tourism, usually something the country with famed resorts and splendid temples can fall back on during soft patches, is languishing. The third season of HBO’s hit television show The White Lotus — set on the southern island of Koh Samui — garnered millions of viewers but failed to pay big dividends for the kingdom.
The response to these woes, which have been building for a long time, hasn’t won rave reviews. Fractious politics aren’t helping. The unwieldy coalition that came together in August to install former leader Thaksin Shinawatra’s daughter, Paetongtarn, as prime minister is under strain. The central bank appeared to be slow-walking needed cuts in interest rates and seemed more concerned with fending off pressure from politicians. Just because ministers urged robust action didn’t mean their arguments were entirely bereft of substance.
https://www.bloomberg.com/opinion/artic ... ong-moment
Thailand Is Languishing at Just the Wrong Moment
Deliberation is generally a sound attribute, but Thailand is discovering it also has costs. The country’s economic woes, magnified by the US trade war, have become too great to ignore.
This isn’t an acute crisis that’s bound to consume the neighborhood in the manner of the late 1990s financial collapse. It’s more of a slow-burning challenge that mixes uber-caution on interest rates at a local level with broader underlying regional trends of tepid price gains and slackening growth. Attention is warranted, nonetheless.
Recession threatens and inflation, already microscopic when Donald Trump returned to the White House, is heading south. Even tourism, usually something the country with famed resorts and splendid temples can fall back on during soft patches, is languishing. The third season of HBO’s hit television show The White Lotus — set on the southern island of Koh Samui — garnered millions of viewers but failed to pay big dividends for the kingdom.
The response to these woes, which have been building for a long time, hasn’t won rave reviews. Fractious politics aren’t helping. The unwieldy coalition that came together in August to install former leader Thaksin Shinawatra’s daughter, Paetongtarn, as prime minister is under strain. The central bank appeared to be slow-walking needed cuts in interest rates and seemed more concerned with fending off pressure from politicians. Just because ministers urged robust action didn’t mean their arguments were entirely bereft of substance.
https://www.bloomberg.com/opinion/artic ... ong-moment
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? - Hunter S Thompson