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Investing.com -- Thailand’s economic growth slowed in the second quarter of 2025, with GDP rising 2.8% year-on-year, down from 3.2% in the previous quarter.
The Q2 figure came in slightly above the consensus estimate of 2.5% but below the previous quarter’s growth rate. In quarter-on-quarter terms, growth eased to 0.6% from 0.7% in Q1.
Exports remained the main economic driver, expanding by 12.2% year-on-year, marginally lower than the 12.3% recorded in the first quarter.
However, this export strength may not continue due to expected drag from US tariffs, while the tourism sector faces challenges from declining Chinese visitor numbers.
Domestic demand showed weakness, with private consumption growth slowing to 2.1% year-on-year from 2.5% previously.
Despite supportive factors like low inflation, interest rate cuts, and the government’s digital wallet scheme, consumer spending remains constrained by high household debt levels.
Bank lending for personal consumption is falling faster than overall lending, which continues to contract year-on-year.
Government spending declined for the third straight quarter and is expected to provide limited support going forward as the government plans fiscal tightening for the 2025/26 fiscal year starting October 2025.
Capital Economics forecasts Thailand’s full-year GDP growth at 2.7% for 2025, only slightly above the 2.5% recorded in 2024.
With sluggish growth prospects and low inflation, the Bank of Thailand is expected to implement at least one more interest rate cut this year.
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