Thailand’s economic growth in 2024 was weaker than expected, continuing to lag behind its regional neighbors as it faces global trade policy challenges and sluggish domestic demand.
GDP Growth Below Expectations
The National Economic and Social Development Council (NESDC) reported that Thailand’s economy grew 2.5% last year, falling short of the 2.7% median estimate from a Bloomberg survey. While this was an improvement from the revised 2% expansion in 2023, it still positions Thailand as a growth laggard in the region.
In the fourth quarter, GDP rose 3.2% year-over-year, below economists’ forecast of 3.8%. On a quarterly basis, the economy expanded by 0.4%, missing the 0.5% median estimate.
Trade Policy and Economic Vulnerabilities
Despite a recovery in tourism and exports, household consumption and manufacturing remain under pressure. The latest phase of U.S. President Donald Trump’s tariff policy and ongoing U.S.-China trade tensions pose significant risks to Thailand, given its substantial trade surplus with the U.S. and the influx of cheap Chinese imports.
Bank of Thailand Governor Sethaput Suthiwartnarueput highlighted trade policy spillover effects as a major concern. “Import flooding is a factor constraining Thailand’s recovery,” he said, noting that many Thai factories have been unable to compete with low-cost imports and have shut down in recent years.
Thailand’s Trade Surplus with the U.S.
Thailand posted a trade surplus of $35.4 billion with the U.S. in 2024. To avoid potential tariffs, the government plans to increase imports of U.S. ethane and agricultural products to balance trade relations and prevent economic fallout from new U.S. trade policies.
Economic Forecast for 2025
The NESDC maintained its growth projection of 2.3%-3.3% for 2025, with expectations of a 3.3% increase in private spending and a 1.3% rise in government consumption. NESDC chief Danucha Pichayanan acknowledged the risks from U.S. trade policies, stating, “We will monitor closely and come up with measures to negotiate with the U.S. We are under the spotlight as we recorded a high trade surplus versus the U.S.”
Domestic Policy Measures
Prime Minister Paetongtarn Shinawatra is pushing for economic stimulus measures, including cash handouts, and is pressuring the Bank of Thailand to cut interest rates to spur growth. The central bank held its policy rate at 2.25% in December after an unexpected quarter-point cut in October and is scheduled to review the rate again on February 26.
Market Reaction
The Thai baht remained stable after the economic data release, while the main stock index opened lower, reflecting investor concerns about Thailand’s economic outlook.
Thailand’s economic recovery remains fragile, with trade policy uncertainties and weak domestic consumption continuing to weigh on growth. The government’s strategy to navigate global trade tensions and stimulate the domestic economy will be critical in shaping the country’s financial future.