Thai FINMIN: GDP growth seen close to 3% y/y in Q1

Thai FINMIN: GDP growth seen close to 3% y/y in Q1

The Thai government has reported that the country's GDP growth in the first quarter of 2025 is expected to be close to 3% year-over-year. This figure is a significant improvement from the previous quarter's growth rate of 1.9% and indicates a recovering economy following the COVID-19 pandemic [2].

The Thai central bank, the Bank of Thailand (BOT), recently lowered its benchmark rate to 1.75% to support economic growth amidst ongoing global uncertainties [1]. The BOT projects that the Thai economy will grow by around 2% this year, but this could slow to just 1.3% if the U.S. imposes even steeper tariffs [1].

Despite the positive growth figures, Thailand faces several challenges. The U.S. tariffs on Thai imports have had a material negative impact on the country's economy, and ongoing trade negotiations with the U.S. government are crucial for mitigating this impact [2]. The Thai government has been actively seeking to negotiate a tariff deal with the U.S. to benefit both sides, with a focus on industries where both countries share interests, such as energy and pet food [3].

Thai exports have shown resilience, with growth hitting a 3-year high in March at 17.8%, and the government expects exports to grow by 2%-3% this year [3]. However, the looming threat of U.S. tariffs could disrupt this positive trend.

The Thai government has implemented various policies to promote economic recovery, including a 450 billion baht ($13.1 billion) stimulus program to boost domestic consumption and debt relief measures for households and small businesses [2]. However, the effectiveness of these measures remains a subject of debate, with some questioning whether they will provide a lasting solution to Thailand's economic problems [2].

In conclusion, while Thailand's GDP growth in Q1 2025 is a positive sign of recovery, the country faces significant challenges due to global trade uncertainties and the impact of U.S. tariffs. The government's efforts to negotiate a tariff deal with the U.S. and implement stimulus policies are crucial for sustaining this growth.

References:
[1] https://www.tradingview.com/news/DJN_DN20250430004658:0-thai-central-bank-cuts-rates-to-support-economy-amid-uncertaintyupdate/
[2] https://thediplomat.com/2025/05/thailand-protests-moodys-decision-to-downgrade-its-economic-outlook-to-negative/
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3R30A0:0-thai-exports-could-beat-2025-target-but-us-tariff-challenge-looms-commerce-minister-says/