Thailand Monthly Thailand Economic MonitorEconomic Monthly Monitor 25 November 2025 The economy slowed and tourism remained weak in the third quarter, despite a strong growth in exports. To bolster growth, the government rolled out a “Quick Big Wins” strategy with short-term stimulus measures, a debt restructuring program, and tax incentives to revive domestic tourism. Fiscal conditions loosened in FY2025 due to higher capital spending and stimulus measures; monetary policy remained accommodative as negative inflation persisted amid lower energy and food prices. Increased current account and portfolio inflows supported appreciation of the baht. The economy deteriorated in Q3, due to slowing tourism Figure 1: GDP growth slowed in Q3 at 1.2% (Percent, year-on-year) revenue and public investment, while goods exports Private consumption Public consumption remained strong. In Q3, growth slowed to 1.2 percent (year-on- Investment Net exports year), down from 2.8 percent in the previous quarter (Fig. 1). 12.0% Change in stocks* GDP, %YoY Manufacturing output shrank by 1.6 percent (year-on-year), the 8.0% first contraction in six quarters. This was driven by a temporary 4.0% shutdown of oil refinery for maintenance and the declining 0.0% production of motor vehicles, plastic, and machinery. In contrast, production of computers and electronics continued to expand, -4.0% consistent with the global demand for components used in data -8.0% centers and related digital infrastructure. Services also weakened -12.0% 1Q23 1Q24 1Q25 as tourism contracted. Private consumption growth stabilized at Note: *Change in stocks includes errors 2.6 percent, while investment weakened due to a contraction in Source: NESDC; World Bank staff calculations. public investment. Figure 2: Tourist arrivals remained low (Tourist arrivals, Index 2019=100) Tourism remained weak, amid declining Chinese and ASEAN 150 Total China ASEAN ROW visitors and fading effects of previous domestic travel subsidies. The number of foreign tourists improved slightly in 100 October, reaching 83.7 percent of pre-pandemic levels with improved arrivals from China, South Korea, Malaysia, and India 50 (Fig. 2). However, in the first ten months of 2025, arrivals declined 7.2 percent year-on-year, due to declining visitors from China and 0 ASEAN, which were 33 percent and 10 percent lower than last Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 year. The drop is linked to safety and security fears as well as Source: Haver analytics; CEIC; World Bank staff calculations. alternative tourist destinations. Domestic travel of Thai nationals also softened in October after the impact of domestic travel Figure 3: Goods export growth was driven by gold and electronics subsidy measures faded. To support the tourism industry, the (Export growth, percent, year-on-year) government provided tax incentives for domestic travel, allowing 20 personal income tax deductions of up to THB 20,000 for domestic 15 tourism and restaurant expenses from October 29 to December 10 15. 5 0 -5 Goods exports rebounded sharply, led by strong growth in Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 electronics, automobiles, and gold. Goods exports rebounded Agriculture products Agro Manufacturing in September, growing 19 percent (year-on-year) compared to Electrical Equipment Electronics Automotives Machinery & Parts 5.8 percent in the previous month (Fig. 3). This stronger-than- Gold Others Exports, custom USD expected export was supported by increased exports of Source: CEIC; World Bank staff calculations. electronics, automotives, and gold. Automotive exports were driven by exports of pickup trucks to the Middle East and auto THAILAND MONTHLY ECONOMIC MONITOR | 1 Official Use Only parts to ASEAN, Japan, and the US. Electronics exports Figure 4: The central government's fiscal deficit continued to grow as they are exempt from the US’ reciprocal widened in FY2025 (Central government deficit, GFS) tariffs and global demand continued to rise. Gold exports 30 0.0 increased due to profit-taking by traders following a 90+ percent -2.0 surge in prices over the past two years. Falling exports of durian 20 -2.8 -2.4 -2.9 and rice contributed to contraction in agricultural output. -4.0 10 -5.3 The central government's fiscal deficit widened in FY2025, -6.0 prompting efforts to sustain medium-term fiscal discipline. -7.6 0 -8.0 In FY 2025, the central government's fiscal deficit (GFS basis) FY21 FY22 FY23 FY24 FY25 Revenue widened to 2.9 percent of GDP, up from 2.4 percent a year earlier Expenditures and above pre-pandemic levels (Fig. 4). The increased deficit Fiscal balance, RHS was supported mainly by higher capital expenditure, as budget Source: CEIC; World BankFiscal balance, FY17-19 avg staff calculations. execution normalized following last year’s delay. On the revenue side, the tax revenue increased due to slightly higher VAT and Figure 5: NPL reached 2.8 percent of total loans and personal income tax collection, as well as higher excise revenue special-mentioned (Percent of total loans) loans continued to rise from the removal of a fuel tax cut. In FY 2025, public debt 12 increased to 64.8 percent of GDP, from 63.2 percent last fiscal 10 year. To sustain fiscal discipline and confidence in fiscal 8 management, the government set a target to reduce the fiscal deficit to below 3 percent of GDP by 2029 and keep public debt 6 under 70 percent of GDP as part of the revised Medium-Term 4 Fiscal Framework (MTFF). 2 0 To stimulate domestic demand and provide near-term Q1-19 Q1-20 Q1-21 Nonperforming Loans Q1-22 Q1-23 Q1-24 Q1-25 Special Mention Loans* household support, Thailand has introduced short-term Note: *SML is loan Overdue of 1 – 3 months measures financed through the existing approved budget. Source: CEIC; World Bank staff calculations. Key policies include the Khon La Krueng plus (“Half-half”) co- Figure 6: Inflation remained the lowest among ASEAN payment scheme, providing around THB 60 billion in subsidies (Percent) for purchases by over 30 million people to stimulate retail and Indonesia Malaysia Philippines Thailand restaurant spending. The subsidy can be used from October 29 Vietnam to December 31. Complementing these demand-side measures, 6.0 the government maintained energy subsidies to ease the cost of living, including electricity price caps at THB 4.18 per unit and diesel and gasoline prices reductions through the Oil Fund. 1.0 In addition, the government rolled out a debt restructuring program aimed at easing household debt and restoring -4.0 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 credit access by transferring small borrowers’ NPLs to asset Source: CEIC; World Bank staff calculations. management companies. The program targets small-scale debtors (total NPLs below THB 100,000 as of September 30) and Figure 7: Inflation has been falling due to prices of energy and fresh food aims to help borrowers with repayment potential clear their bad (Percent) debt records from the National Credit Bureau, enabling them to 6.0 Energy access formal credit. Total NPL amounts to THB 122 billion. 5.0 Core inflation Funding will be drawn from the remaining budget of the “You 4.0 Raw Food Fight, We Help” debt relief scheme funded by the reduced 3.0 Headline inflation contribution to the FIDF—from 0.46 percent to 0.23 percent. By 2.0 Target range of 1-3% transferring bad loans to AMCs, the scheme allows banks to 1.0 offload NPLs, reduce repayment burdens, and restore credit 0.0 access for small borrowers, thereby easing household financial -1.0 distress and supporting broader financial stability. As of the -2.0 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 second quarter, NPL reached 2.8 percent of total loans and Source: CEIC; World Bank staff calculations. special mentioned loans reached 6.8 percent (Fig. 5). THAILAND MONTHLY ECONOMIC MONITOR | 2 Official Use Only Inflation remained persistently negative due to relative price Figure 8: Thai baht NEER appreciated (Index 2020 =100) changes and subsidies. In October, headline inflation declined 110 for the sixth consecutive month, falling to -0.76 percent—the lowest rate among ASEAN peers and emerging markets (Fig. 6). 105 The decline reflected lower energy prices and fresh food prices. 100 Energy prices continued to decline due to falling global oil prices and ongoing government subsidies, including reduced electricity 95 prices at least until December. Fresh food prices also eased on 90 favorable harvests and weakened demand for pork. Core inflation (excluding fresh food and energy) dropped to a fifteen-month low 85 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 at 0.62 percent as weakening domestic demand weighed on IDR MYR PHP THB prices, especially apparels and footwear (Fig. 7). Inflation has Source: CEIC; World Bank staff calculations. remained well below the central bank’s 1–3 percent target. Figure 9: The current account recorded a surplus in September The THB NEER appreciated, driven by a strong current (USD million) account surplus. The baht NEER appreciated by 1.2 percent in BOP: USD: Trade Balance BOP: USD: Services, Primary Income & Secondary Income the first ten days of November, similar to the Malaysian ringgit BOP: USD: Current Account Balance (Fig. 8). The current account turned into surplus at 4.0 percent of 6000 GDP in September, as goods trade balance surplus increased, 4000 driven by strong goods exports (Fig. 9). The services deficit also narrowed as tourism receipts improved. In early November, the 2000 stock market and government bond market recorded net inflows. 0 -2000 -4000 Jan-23 Jan-24 Jan-25 Source: CEIC; World Bank staff calculations. News Highlights: Issues to Watch: • Thailand to reduce fiscal deficit to below 3% of GDP by 2029 • Trade: How will global trade policy changes • (Nation Thailand, Link). affect the Thai economy? • Upskilling scheme targets small entrepreneurs (Bangkok Post, Link). • Flood impact: How will the recent floods affect households and private consumption? • 1,300 sq km under water in four central provinces (Reuters, Link). • Fiscal: How much can the new government’s stimulus measures boost growth? Prepared by Warunthorn Puthong (Economist). For further questions, please email wputhong@worldbank.org THAILAND MONTHLY ECONOMIC MONITOR | 3 Official Use Only Selected Economic and Financial Indicators 2024 2024 2025 2025 Q4 Q1 Q2 Q3 Jun Jul Aug Sep Oct GDP and Inflation (%YoY) GDP growth (real) 2.5 3.3 3.2 2.8 - Contribution to GDP growth: Private consumption 2.6 1.9 1.4 4.3 - General Government consumption 0.4 0.8 0.4 -0.7 - Gross fixed capital formulation: Private -0.3 -0.4 -0.2 0.5 - Gross fixed capital formulation: Public 0.3 1.6 1.2 -0.3 - Net Exports of goods and services 1.3 2.4 7.0 1.6 - Change in Inventory 0.0 -2.7 -4.7 0.2 - Residual and errors -1.7 -0.4 -2.2 -2.8 - GDP, nominal (USD Billion) 528 142 140 138 - GDP, nominal (THB Billion) 18583 4,823 4,763 4,578 - Consumer Prices Index: Headline 0.4 1.0 1.1 -0.3 -0.7 -0.3 -0.7 -0.8 -0.7 -0.8 Consumer Prices Index: Core 0.6 0.8 0.9 -0.3 0.8 1.1 0.8 0.8 0.7 0.6 Output Indicators Manufacturing Production Index (%YoY) -1.2 -1.7 -1.6 1.4 -2.4 0.4 -3.7 -4.4 1.0 Capacity Utilisation (%) 59.0 57.7 61.0 59.0 57.4 59.5 56.9 57.1 58.1 Farm Production Index (%YoY) 0.5 -0.8 5.6 6.5 1.9 10.4 7.1 1.7 -3.2 Service Index (%YoY) 8.5 9.6 8.7 6.4 1.0 5.6 2.3 -1.0 1.6 Labor Market Unemployed workers (Thousand Persons) 402.2 358.2 357.7 365.5 Unemployment rate (%) 1.0 0.9 0.9 0.9 Balance of Payments (USD million) Current account 11,619 5,082 11,158 941 2,749 3,108 2,397 -1,521 1,873 Current account (% of GDP) 2.2 3.6 7.9 0.7 2.0 6.7 5.2 -3.3 4.1 Trade Balance 21,359 6,467 8,174 5,288 6,965 3,312 2,514 810 3,641 Exports of goods (%YoY) 24 10.8 14.9 15.0 11.5 16.1 9.7 5.5 19.2 Imports of goods (%YoY) 22 9.2 7.1 16.8 12.2 13.8 4.5 14.7 18.0 Service, primary and secondary Income -9,740 -1,385 2,984 -4,348 -4,216 -205 -117 -2,330 -1,768 Tourist Arrivals (Thousand Persons) 35,546 9,457 9,549 7,136 7,430 2,323 2,610 2,584 2,236 2,574 Financial account -7,308 -3943.6 -10223.5 84.9 - Financial account (% of GDP) -1.4 -2.8 -7.3 0.1 - Foreign direct Investment, net 6,947 3,551 1,739 2,390 - Portfolio flows -20,103 -10,256 -10,238 -6,850 - Other Investments 5,010 2,316 -1,971 4,232 - Central Government Budget (Fiscal Year, THB billion)/2 Revenue 3,434 764 787 1,034 987 416 275 284 428 - Expenditure 4,015 1,186 957 977 999 389 291 263 445 - Central Government balance -581 -422 -170 57 -12 27 -16 21 -16 - Central Government balance (% of GDP) -3.1 -8.8 -3.6 1.2 -0.3 Public debt (% of GDP) 63.2 63.8 64.5 64.3 64.8 64.3 64.5 64.6 64.8 - Financial Markets Indicators Policy rate (%) 2.25 2.25 2.00 1.75 1.50 1.75 1.75 1.50 1.50 1.50 M2 (%YoY) 2.30 2.7 2.3 1.4 2.6 1.6 1.9 3.2 2.8 - Household Debt (% of GDP) 88.4 88.4 87.1 86.8 SET Index 1,400 1400 1158 1090 1274 1,090 1,242 1,237 1,274 1,310 Thai government bond yield, 10-year (%) 2.25 2.25 2.06 1.61 1.40 1.61 1.48 1.29 1.40 1.69 Foreign exchange reserve 262 262 270 285 296 285 284 290 296 and FX forward position (USD billion) USD/THB, end of period 33.99 34.0 33.9 32.6 32.3 32.56 32.70 32.31 32.30 32.34 THB NEER, average 121.0 126.3 127.7 127.2 129.6 128.0 128.8 129.2 130.8 129.3 1/ Underemployment accounts for workers who are occupied less than 35 hours per week and are available for additional work (defined by BOT). 2/ Fiscal Year 2025 begins in October 2024 and ends in September 2025, Fiscal Balance according to GFS. Source: Office of the National Economic and Social Development Council, Bank of Thailand, Office of Industrial Economics, Ministry of Industry National Statistical Office of Thailand, Fiscal Policy Office, Public Debt Management Office, Haver Analytics. THAILAND MONTHLY ECONOMIC MONITOR | 4 Official Use Only