Thailand’s economy faces a subdued growth outlook for 2025, with GDP expected to expand between 1.8% and 2.2%, according to Payong Srivanich, Chairman of the Thai Bankers’ Association and head of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), after its September meeting.
Economic momentum in the second half of the year is likely to slip to just 1% as heightened political uncertainty weighs on government spending and erodes private-sector investment confidence, he said. The risk of a downgrade to Thailand’s sovereign credit rating is also climbing, driven by concerns over policy continuity and fiscal health.
Payong noted that credit rating agencies are monitoring two main factors: the country’s debt-service capacity—which remains manageable—and the government’s long-term revenue outlook, dependent on sustained growth and efficient tax collection.
International investors are particularly attentive to whether the government can maintain the pace of public and private investment and use tax revenues effectively to stimulate growth. Prolonged economic stagnation or policy gridlock could shake investor confidence and put further pressure on Thailand’s credit rating.
Assessing the political environment, Payong said uncertainty remains high, with no clear picture emerging of the new administration. Soft loan programs, while disrupted by political crosswinds, have not yet stalled completely, he added. Should Parliament dissolve, the caretaker Cabinet would continue to function. The Finance Ministry remains operational, but urgent spending requests may need to be expedited, while less-critical matters can afford to wait.
The JSCCIB also flagged the strengthening baht as a concern, especially given its disconnect from the country’s weak economic fundamentals and its correlation with rising global gold prices. There is also a lack of clear data on the impact of gold and cryptocurrency transactions, as well as remittances from foreign workers sent through informal channels.
This opacity makes it difficult to gauge the true balance of payments, with over half remaining unidentifiable. Payong urged authorities to analyze gold market transactions and called for structural reforms to restore balance, suggesting the possible setup of a Sovereign Wealth Fund to manage foreign investment mechanisms more effectively.
Earlier this July, Payong and representatives from the Bank of Thailand, the National Economic and Social Development Council, and the Fiscal Policy Office agreed on the urgent need to restore economic confidence and accelerate Thailand’s recovery in the face of U.S. trade policy headwinds and chronic domestic structural challenges. These include high household debt, income inequality, the size of the informal economy, a shortage of skilled workers, and shifting government policies.
To address these challenges, a new cross-sectoral platform titled “Reinvent Thailand – A Platform for Sustainable Policy Execution” has been established. The initiative aims to reshape the nation’s economic future by allowing public and private sectors to co-design and implement practical, data-driven structural reforms.
In the near term, the platform will prioritize two key areas: addressing household debt by expanding access to formal credit and reducing reliance on informal loans, and strengthening business competitiveness through technology investment, workforce upskilling, and state procurement incentives. The approach is designed to serve as Thailand’s “economic compass,” guiding the country towards sustained growth and improved quality of life well into the future.
Separately, Finance Minister Pichai Chunhavajira responded to the JSCCIB’s GDP assessment by noting that its forecast for 1% growth in the second half of 2025 was based on data prior to the resolution of U.S. import tariff issues.
Following greater clarity on this front, most institutions have revised their full-year GDP estimates up to more than 2%, even though the practical effects of the 19% tariff rate remain unclear. Pichai expressed confidence that, should the government continue to execute successfully and without major disruptions, GDP growth could reach as high as 2.5% in 2025.
He also played down concerns over the political situation, describing it as a normal and recurring phenomenon in Thailand that is unlikely to significantly undermine investor confidence or the country’s stability.
Pichai affirmed that the current fundamentals for Thailand’s credit rating remain unchanged and emphasized that ongoing political transitions are unlikely to deter long-term investment, as most foreign investors already take such uncertainties into account when deciding to invest in the country.
