
The Fiscal Policy Office (FPO) expects economic expansion of up to 3.5% is likely this year, rising from 2.5% last year.
However, the Finance Ministry's planning unit still projects average annual growth of 3% this year, within a range of 2.5% to 3.5%.
Pornchai Thiraveja, director-general of the FPO, said four factors should drive the growth: private consumption, exports, tourism, and public and private investment.
Private consumption is expected to grow steadily at 3.3% per year, supported by government stimulus measures and sustained agricultural income growth.
Export value is projected to expand by 4.4% annually, in line with rising global demand and an improving economic outlook among trading partners.
The tourism sector is also expected to continue its growth, with foreign tourist arrivals projected to reach 38.5 million, raising tourism revenue and supporting related service and manufacturing sectors.
Private investment is predicted to rebound to 2.7% growth this year from a contraction of 2.7% in 2024 based on two factors, according to the FPO.
The first is an acceleration of large investment projects supported by the Board of Investment (BoI). Investment promotion applications exceeded 1.14 trillion baht in 2024, the highest in a decade.
More than 3,100 projects applied for investment promotion, and actual investments are expected to materialise 1-4 years after approval.
Another factor is public sector investment, which is projected to grow by 3.4% per year due to continuous disbursement of investment expenditure and the acceleration of key projects aimed at enhancing competitiveness and stimulating further private investment.
In addition, the expedited disbursement of the 2025 budget is expected to drive government consumption growth by 1.3% per year, said Mr Pornchai.
He said there is a high likelihood economic growth could reach the upper forecast range of 3.5% this year, provided five factors are effectively managed.
The first factor is an acceleration of public investment budget disbursement from the target of 75% to 80%, which would inject an additional 46.5 billion baht of public investment, adding 0.11 percentage points to GDP.
The government is also committed to expediting spending in the third phase of the digital wallet scheme, expected to launch in the second quarter, which could contribute an additional 0.1 percentage points to GDP, according to the FPO.
The "Houses for Thais" project is estimated to have 830 million baht in investments by the end of this year, adding 0.002 percentage points to GDP.
The government also pledged continued tourism stimulus, particularly during Thailand's hosting of the SEA Games later this year, which is expected to attract an additional 500,000 foreign tourists beyond the 38.5 million forecast, contributing another 0.15 percentage points to GDP.
In addition, private sector investment projects that received BoI investment promotion certificates, particularly data centres and cloud region projects with potential investments of up to 75 billion baht, are expected to be expedited. This investment is estimated to add 0.19 percentage points to GDP, said the planning unit.
Regarding the acceleration of public investment disbursement, which plays a crucial role in stimulating the economy, Mr Pornchai said although the official target for budget disbursement is set at 75% of the total investment budget, disbursement in fiscal 2025 is expected to be more effective because the Budget Bureau established a key indicator for the 2026 budget planning process, stating that if any state agency fails to disburse its investment budget as planned in 2025, it will not be considered for an increased investment budget in 2026.
This measure should encourage government agencies to expedite their budget disbursement, he said.
For 2024, the FPO estimates economic growth of 2.5%, rising from 1.9% in 2023, but falling short of its forecast of 2.7%.
The lower growth was attributed to the contraction of the Manufacturing Production Index, particularly for vehicles powered by internal combustion engines, which were affected by the popularity of electric vehicles.
The manufacturing sector accounts for 26% of GDP, with the automotive industry contributing 11% of total manufacturing.
Last year's economic growth was primarily driven by the continued recovery of the tourism sector, with foreign arrivals rising to 35.5 million, along with private consumption, which was projected to expand by 4.7%, supported by government stimulus measures and increased consumer confidence.
The value of exports in US dollars, based on balance of payments statistics, was expected to grow by 5.9% to a record high.
However, the FPO said several risks could impact Thailand's economic outlook in 2025, including US economic policies and countermeasures from affected countries; the impact of an influx of Chinese products on the local manufacturing sector; the confidence of foreign tourists to travel to Thailand; and geopolitical conflicts in various regions that could cause economic volatility and constrain global and Thai economic growth.
In addition, household and business debt could affect purchasing power and future spending, said Mr Pornchai.