Capital Economics, an independent economic research firm, forecasts that Thailand’s economic growth will accelerate in 2025, driven by an expansionary fiscal policy and a continued recovery in tourism spending.
While Thailand’s economy showed signs of a slowdown in 4Q24, with GDP rising by 3.2 percent year-on-year—below the consensus of 3.9 percent—the firm remains optimistic about the nation’s future prospects.
The 4Q24 growth of 3.2 percent aligned closely with Capital Economics’ forecast of 3.3 percent. Quarter-on-quarter, growth slowed to 0.4 percent, down from 1.2 percent in 3Q24. Despite this, the economy remained 5 percent above pre-pandemic levels, although it trailed the pre-pandemic growth trajectory. For 2025, GDP growth is projected at 2.5 percent, up from 2 percent in 2023.
The 4Q24 slowdown was driven by various factors, including a slight dip in private consumption and a sharp decline in fixed investment, reflecting weaknesses in both public and private sector spending.
Thailand plans to adopt a looser fiscal policy compared to many other Asian nations, with the government forecasting a wider budget deficit for the fiscal year (October 2024 – September 2025), expected to reach 4.4 percent of GDP, up from 3.6 percent the previous year.
This policy shift is part of a broader strategy to revitalize Thailand’s tourism sector, which was heavily impacted by the pandemic. The government aims to attract 39 million international tourists and increase tourism revenue by 7.5 percent in 2025, with a focus on sustainable tourism practices and improving the overall visitor experience.
In line with this recovery strategy, Thailand’s Cabinet has approved a draft bill to legalize casinos within designated entertainment complexes, modeled after successful frameworks in Singapore. The bill still needs to pass through future stages before full approval and implementation.
This initiative is expected to boost tourism by 5 to 10 percent and create up to 15,000 jobs. Additionally, the legalization of casinos aims to curb illegal gambling and attract foreign investment into the country.
