The Thai government is being urged to introduce an investment stimulus package in the second half of this year to boost the economy and mitigate the impact of US trade countermeasures.
Meanwhile, the National Economic and Social Development Council (NESDC) expects Thailand's economic growth to reach 2.8% in 2025, compared with 2.5% last year.
Speaking during a press briefing on Thailand's economic performance in the fourth quarter of last year and the overall economic outlook for 2024 and 2025, Danucha Pichayanan, secretary-general of the NESDC, said that if issues arise in the second half of the year due to the impact of US trade measures, additional investment funds could help sustain Thailand's economic growth to some extent.
Mr Danucha said the economy is expected to grow within a range of 2.3-3.3% in 2025, with an average estimate of 2.8%.
As for the funding of the government's investment stimulus package, Mr Danucha said that the government has allocated money from emergency and essential budgets, along with the remaining 157 billion baht from the 2025 fiscal year economic stimulus budget. The package may be assembled by drawing from multiple sources, but this would ultimately depend on government policy, he said.
According to Mr Danucha, the 2.8% economic growth projection for 2025 already factors in the impact of the government's digital wallet programme and global trade volatility risks, including potential new trade barriers that may arise, especially in the latter half of the year.
"The government's ambitious target of 3-3.5% growth this year then requires additional measures, particularly in investment and consumption stimulus. A key priority is to encourage investment, especially in the private sector," he said.
The distribution of public investment funds will also require the creation of an additional investment package, particularly for small-scale water management projects, each valued at 5-10 million baht, to accelerate budget disbursement.
These projects will contribute to the creation of long-term production factors for local communities and enhance the stability of national water management.
"Additional funding in this area could help the government achieve its growth target, but external risks -- especially trade wars -- must be continuously monitored," he said.
PERFORMANCE AND OUTLOOK
In 2024 the Thai economy grew by 2.5%, marking an acceleration from the 2% expansion recorded in 2023.
The key drivers of Thailand's economic growth in 2024 were the expansion of consumption and public investment, especially with public investment growing by 4.8%.
Private sector investment contracted by 1.6%, while exports, in US dollar terms, grew by 5.8%. However, in the fourth quarter of 2024, the economy grew only 3.2%, primarily due to challenges in the manufacturing sector, particularly in the automotive and real estate industries.
According to Mr Danucha, the economy is expected to grow within a range of 2.3-3.3% in 2025, with an average estimate of 2.8%.
Overall investment is forecast to grow by 3.6% this year compared with zero growth in 2024, with private sector investment rebounding to 3.2% (from a 1.6% decline in 2024). The surge in private investment is attributed to a record-high number of Board of Investment (BoI) applications, totalling 3,137 projects in 2024 -- a 40.4% increase from the previous year -- representing an investment value of 1.14 trillion baht (up 34.5%).
Actual BoI-approved investment reached 850 billion baht last year, marking a 72.5% increase.
Meanwhile, public investment is projected to grow by 4.7%, slightly lower than the 4.8% expansion in 2024.
Private consumption is projected to grow by 3.3%, continuing its expansion from 4.4% in 2024. Public sector consumption growth, however, is expected to slow to 1.3%, down from a 2.5% expansion in 2024.
Meanwhile, exports (in US dollar terms) are expected to grow by 3.5% in 2025, down from a 5.8% expansion in 2024, in line with global trade growth trends.
According to Mr Danucha, the government's economic management this year should: prioritise managing the impact of US trade policy changes; implement anti-dumping measures and strengthen import quality controls; promote high-potential Thai exports; accelerate free-trade agreement negotiations; and encourage exporters to hedge against currency volatility.
The government is also advised to boost private sector investment by: enhancing investor confidence; accelerating public investment disbursement; addressing household debt, which currently stands at 89% of GDP; and enhancing the tourism sector by tackling PM 2.5 pollution and ensuring visitors' safety and security.
According to the NESDC, in 2024 Thailand welcomed 35.5 million foreign tourists, generating 1.5 trillion baht in revenue. In 2025, the number of tourist arrivals is expected to rise to 38 million, contributing 1.69 trillion baht to the economy.
GROWTH TO SLOW IN Q1 AND Q2
Nattaporn Triratanasirikul, deputy managing director of Kasikorn Research Centre (K-Research), said the GDP growth in last year's fourth quarter was quite a surprise as exports, tourism and consumption had already improved.
K-Research earlier anticipated GDP expanding by 3.7% in the last quarter, significantly higher than the 3.2% figure released by the think tank on Monday.
"We are surprised that exports have rebounded but that has not yet translated into an improvement in the manufacturing sector, possibly because inventories remain high both in the industrial and agricultural sectors," Ms Nattaporn told the Bangkok Post.
The government's disbursement and spending have already improved while private investments remained stagnant in last year's final quarter, she added.
Looking ahead, K-Research expects GDP growth to remain slow in this quarter and the next. The second half of 2025 is of particular concern amid uncertainties and greater competition in the global market thanks to Donald Trump's policies.
"Additional economic stimulus, if needed, must be "specially targeted" short-term measures given that the government has a limited fiscal budget," Ms Nattaporn noted, adding that the think-tank forecasts 2025 GDP growth of 2.4%, which is "pretty low".
K-Research expects the Bank of Thailand to cut interest rates once or twice this year. "But the role of interest rate cuts should be for maintaining economic stability. Fiscal measures, instead, should play a greater role in boosting the economy," Ms Nattaporn said.