In its Thailand GDP Outlook, Bualuang Securities (BLS) wrote that the Thai economy is set to slow markedly in 3Q25 and 4Q25, with GDP growth of just 1.3% YoY and 0.1% YoY, respectively. Despite small positive YoY prints, seasonally adjusted GDP will decline in QoQ terms for two straight quarters BLS forecasts (down by 0.4% QoQ, sa in 3Q25 and 0.7% QoQ, sa in 4Q25), implying a technical recession.
The main drag is steeply lower exports following the US “reciprocal” import tariff taking effect on August 7, 2025, while frontloading began to slowdown in the third quarter. Thai exports subject to the tariff comprise 53.9% of Thai exports to the US. This intensifies the downside risk to an economy for which exports equal 65% of nominal GDP. Additional pressures stem from potential delays to public budget disbursement during the post-election govt transition period— particularly for public investment spending—and due to a high export-driven 7M25 base.
BLS expects the economy to trough in 4Q25, followed by a gradual recovery through 2026. The recovery will be led by FDI-driven private investment (chiefly in digital and electronics space), alongside a steady tourism recovery, supported by new source markets. Government stimulus is expected to provide only a modest boost to GDP in the 0.1-0.2% range, given the budgetary constraints of the caretaker administration.
The headwinds will be strong in 1H26 (a YoY contraction in exports, the risk of delays to public spending in the government transition period), then ease in 2H26. Hence, BLS projects 2026 GDP growth of 1.6%, slower than its 2025 forecast of 1.8% (base-case scenario), due mainly to the high 7M25 export base. But underlying activity should improve progressively, supporting an ongoing recovery through 2026.
