Thai economy seen growing 3.0% in 2025: finance ministry
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Thai economy seen growing 3.0% in 2025: finance ministry

Automotive and tourism sectors face challenges

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FILE PHOTO: EV cars are pictured inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, July 4, 2024. (Reuters)
FILE PHOTO: EV cars are pictured inside BYD's first electric vehicle (EV) factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player, in Rayong, Thailand, July 4, 2024. (Reuters)

Thailand's economy is expected to grow 3.0% this year, led by increased tourism, exports and private consumption, the finance ministry said on Thursday, unchanged from a previous forecast.

Exports, a key driver of growth, were seen rising 4.4% this year, stronger than an earlier forecast of 3.1%, Pornchai Thiraveja, head of the finance ministry's fiscal policy office, told a press conference.

Southeast Asia's second-largest economy is estimated to have expanded 2.5% in 2024, compared with the 2.7% growth projected earlier, the ministry said.

Official gross domestic product data is due on Feb 17.

"Growth last year was revised downwards due to a larger than expected fall in industrial investment from contraction in the auto sector," Mr Pornchai said.

Thailand is an auto production and export hub and home to regional operations of Japanese carmakers Toyota and Honda. But domestic sales hit a 15-year low due to tightening credit conditions and slow exports have dampened the industry with production reaching a four-year low in 2024.

A transition to electric vehicles dominated by Chinese EV companies also threatened the auto parts supply chain.

The government is also trying to ensure that the transition is smooth, said Mr Pornchai.

Private investment was seen growing 2.7% this year, reversing from a fall of 2.7% in 2024, ministry data showed, while private consumption was forecast to grow 3.3% this year, from 4.7% a year earlier.

Investments this year will improve after more incentives are rolled out to draw in foreign investors, especially in cloud services and data centres, he said.

ByteDance's TikTok plans a $3.8 billion data hosting service, according to the Thai investment board, following similar plans from Google and Amazon Web Services.

"Growth can reach 3.5% from the base of 3.0% if we push," Mr Pornchai said, adding that accelerated government spending would also support growth.

Tourism is also a key engine of growth and the ministry projects 38.5 million foreign visitors this year, compared with the 39 million projected earlier, close to the record of nearly 40 million visitors set in 2019, before the pandemic.

The revised tourism forecast is partly due to concerns of Chinese tourists, which will be closely monitored, he said.

Thailand rushed to reassure Chinese tourists after questions about their safety were triggered earlier this month after actor Wang Xing went missing on the Thai-Myanmar border. Authorities said he may have been a victim of human trafficking by criminal groups.

China is the largest source for Thailand's tourism industry, accounting for nearly a fifth of arrivals in 2024.

Last year, there were 35.5 million foreign tourists, up 26.3% year-on-year.

The ministry predicts headline inflation at 0.9% this year, compared with a previous forecast of 1.0%, inside the central bank's target range of 1% to 3%.

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