Thailand’s economic outlook is set to brighten in 2025, with a boost from expansionary fiscal policies and a continued revival in tourism, according to Capital Economics, an independent economic research firm
Despite a slowdown in the fourth quarter of 2024, where GDP grew by 3.2% year-on-year—falling short of the 3.9% consensus forecast—Capital Economics remains confident in Thailand’s growth trajectory. The reported figure closely aligned with the firm’s own estimate of 3.3%.
On a quarter-on-quarter basis, growth slowed to 0.4% in Q4 2024, down from 1.2% in the previous quarter. However, the economy remained 5% above pre-pandemic levels, though still trailing its pre-pandemic growth trend. Looking ahead to 2025, Thailand’s GDP is projected to expand by 2.5%, an improvement from 2% in 2023.
The Q4 2024 slowdown was attributed to a combination of factors, including a marginal decline in private consumption and a sharp drop in fixed investment, signaling weaknesses in both public and private sector spending.
In response, Thailand is embracing a more expansionary fiscal stance than many of its Asian counterparts. The government has forecasted a wider budget deficit for the fiscal year spanning October 2024 to September 2025, projecting it to reach 4.4% of GDP, up from 3.6% the previous year.
A key driver of economic recovery is the government’s focus on revitalizing tourism, a sector heavily impacted by the pandemic. Authorities aim to attract 39 million international tourists in 2025, targeting a 7.5% increase in tourism revenue. The strategy emphasizes sustainable tourism and enhanced visitor experiences.
As part of its broader economic stimulus efforts, Thailand’s Cabinet has approved a draft bill to legalize casinos within designated entertainment complexes, modeled after Singapore’s successful framework. The bill remains subject to further legislative approval before implementation.
This initiative is expected to stimulate tourism growth by 5-10% and generate up to 15,000 jobs. Additionally, the legalization of casinos aims to curb illegal gambling while attracting foreign investment into Thailand’s economy.
With these measures in place, Thailand is well-positioned to accelerate economic growth in 2025, reinforcing its status as a key player in the regional economy.
