Thailand’s 2025 economic outlook remains uncertain, heavily relying on foreign tourism. Experts warn of tighter credit, higher non-performing loans, and the impact of Chinese trade dumping, while household debt and informal lending will continue to hinder growth.
The Chairman of the Thai Chamber of Commerce and a top securities house on Thursday warned of tighter lending conditions in Thailand due to an uneven economic recovery. While both reported somewhere between 2.6–2.8% GDP growth for the year, they highlighted concerns about the kingdom’s over-reliance on foreign tourism to power the economy. Maybank Securities predicted a higher non-performing loan rate and dampened profits in the banking sector. At the same time, Sanan Angubolkul of the Chamber expressed concern about the disastrous impact of persistent dumping from China on small Thai manufacturers.
On Thursday, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) provided its outlook for the Thai economy in 2025. It was a cautious and considered assessment.
The outlook was presented by Sanan Angubolkul, Chairman of the Thai Chamber of Commerce. Firstly, Mr. Sanan suggested the potential for 3% growth this year. However, the Federation of Thai Industries (FTI) has put forward a projection of only 2.4–2.9%.
At this time, Thailand’s economy is facing many uncertainties. On one hand, the country has achieved consistent growth. Nonetheless, this growth is presently being driven by the foreign tourism sector, which is a key engine propelling the economy forward.
Thailand achieved 35.54 million visitors in 2024, which was a significant 26.27% increase from the previous year. The total spend was ฿1.67 trillion, with an average spend per tourist of ฿45,300. This figure is only 90.6% of the average spend seen in 2019, while the visitor numbers themselves reached 89% of Thailand’s record tourism year before the COVID crisis.
Foreign tourism growth projections in 2025 face uncertainties due to global trade and tourism dynamics
Certainly, the projection for next year is 39 million visitors. At the same time, Mr. Sanan and business leaders suggest that exports will grow by 1.5% to 2.5%. Of course, the latter depends on the level of trade friction or potential resolutions that may occur as the country progresses deeper into 2025.
On Thursday, Ms. Sasikarn Wattanachan, Deputy Government Spokesperson, revealed the foreign tourism figures. Notably, she shared that arrivals in the first five days of 2025 amounted to 505,411 foreign tourists. At that rate, Thailand would only be on course for 37 million visitors. Particularly, it should be noted that this is the high season for foreign tourism.
The Government House spokesperson also revealed that total foreign tourism income for the five days was ฿25.299 billion. This shows an average spend of ฿50,056, which is encouraging. The top five arrival countries were China, Malaysia, Russia, South Korea, and India. These countries sent 228,222 tourists, or 45.15% of the total.
Also this week, Maybank Securities in Bangkok predicted GDP growth of 2.6–2.8% in 2025. It warned that banking sector loan growth would be stymied by economic conditions.
Banks face tighter credit conditions and non-performing loan growth amid challenges in the Thai economy
At the same time, banks are reining in credit to both households and smaller firms. While bank lending will rise marginally in 2025, it will be driven nearly exclusively by corporate lending. Simultaneously, non-performing loans are already growing. The current figure is 2.91%, while special mention loans are rising rapidly.
“We forecast aggregate loans for banks to grow only 1.4% year-on-year in 2025, driven by corporate lending,” said Mr. Jesada Techahusdin.
“We see solid recovery in the tourism and service sectors, but these require less capital than manufacturing,” he outlined. “Sectors such as petrochemical and automotive face competitive challenges, resulting in reduced output and loan contraction.”
Furthermore, with loan growth being trimmed back, it is expected that the official non-performing loan rate will rise significantly in 2025.
Securities firms predict dampened bank profits and reduced lending space in 2025 amid economic pressures
In summary, the securities firm also predicted dampened bank revenue in 2025. Firstly, bigger non-performing loans combined with less loan growth will impact the bottom line. Secondly, a predicted two cuts in bank interest rates from 2.25% to 1.75% by the central bank will reduce the space for banks to generate profit.
On Thursday, however, the Thai Chamber of Commerce’s Mr. Sanan expressed his main concern: the outlook for trade. Notably, he criticized President Donald Trump’s proposed trade policies. These include a 60% tariff rate on all Chinese imports to the United States and a flat rate of 1–20% on all other nations.
Fears have been further heightened by a more robust response from China, which has already begun engaging in trade protection activities. In brief, Thailand’s trade could potentially be severely impacted by what is shaping up to be an escalating U.S.-China trade war.
In the meantime, with the Thai government set to progress to stages 2 and 3 of its economic stimulus giveaway measures, there is notable momentum going into 2025 despite a shortage of cash flow in the economy. However, small business concerns are struggling to stay open.
Economic challenges intensify as manufacturing and debt burdens threaten long-term growth in Thailand
At length, the industry leader said he was less worried about the first six months but emphasized that all sectors must cooperate to deal with challenges in the second half of 2025.
At this time, Thailand is facing an unprecedented challenge to its manufacturing base. Mr. Sanan called for faster and more decisive action against Chinese firms dumping goods in the Thai market.
In addition, he referred to a survey by the Faculty of Economics at Chulalongkorn University. Significantly, it revealed that 40% of Thai households are mired in informal debt obligations. The average debt level per household was ฿98,538, which is equivalent to 13% of GDP. According to the Thai Chamber of Commerce, real household debt is 104.5% of GDP.
Informal debt and economic informality continue to slow down Thailand’s economic recovery and growth
Clearly, the issue is extremely complex, as lenders often interconnect with borrowers. Thai families and close friends frequently engage in borrowing network activity to make ends meet.
The business leader underscored that up to 50% or more of Thailand’s economy is informal. This is just one of many chronic issues contributing to the country’s inability to achieve faster economic growth.
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Economy sees a sharp setback with lower private spending, investment and foreign tourism income
Significantly, 30% of households relying on formal economy-sourced income still resort to informal borrowing. Mr. Sanan emphasized the need for government action against Chinese dumping, which should be expedited decisively.
He called for action under the Anti-Dumping and Countervailing Duty Act (1999) and the Act on Measures to Protect Against Increased Imports (2007).
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