On May 20, Ms. Sirikanya Tansakun, list-MP and deputy leader of the Progressive Party, posted a Facebook analysis stating that Thailand’s 3.1% GDP growth in Q1 2025 stems from fragile foundations.
Exports – Hero or Villain?
Exports rose significantly, particularly to the U.S. (up 25%) due to pre-tariff shipment acceleration. However, domestic industrial production grew just 0.6%, raising suspicions of re-exported goods or “origin masking” as the cause of export growth. If Thailand cracks down on these unauthorized practices, future exports may decline, showing the real domestic production capacity.
Delayed 2024 Budget Effects
Public investment jumped 26.3%, driving an overall 4.7% increase in investment. However, this stems from a low base due to the delayed FY2024 budget. Private investment, conversely, shrank by 0.9%—its fourth consecutive quarterly decline. The budget’s delay alone contributed 1.5 percentage points to Q1 GDP, an impact that won’t recur next quarter.
Tourism Losing Momentum
While tourism services grew by 7%, it’s down from 25% growth seen during the initial post-COVID rebound. Visitor arrivals from major markets like China and Malaysia have softened, and full-year tourist numbers may fall below the 39 million target, further dampening GDP.
Sirikanya concluded that the 3.1% growth is no cause for celebration. Structural weaknesses remain, and economic contraction or a technical recession is possible in the latter half of the year. She urged the government to prepare new stimulus policies to counter these risks.