Home and car sales are projected to grow at a low rate this year, bouncing back from deep contractions in 2024, as the economy expands slower than regional peers, according to Krungsri Research.
The research unit of Bank of Ayudhya (Krungsri) forecasts both vehicle production and domestic sales to increase by 1.5-2.5% this year, with exports rising 2-3%, said chief economist Pimnara Hirankasi.
The rebounds for local output and domestic sales are from steep contractions of 20.2% and 26%, respectively, last year.
The research house anticipates new vehicle sales of less than 600,000 units this year.
Ms Pimnara said the industry recovery would be supported by battery electric vehicles (BEVs), with BEV registrations forecast at 75,000 units this year. Registrations of hybrid EVs and plug-in hybrid EVs are projected at 140,000 and 10,000 units, respectively.
She said new home sales are expected to edge up 1.2% as new supply grows by 2.5%.
"The marginal growth rates of both vehicle and home sales this year align with slower growth of the Thai economy amid high household debt levels and tight loan criteria in those segments," said Ms Pimnara.
"We also expect low growth of auto and mortgage loans in 2025."
Krungsri projects Thai GDP growth of 2.7% this year, rising from 2.5% in 2024.
A growth rate of 2.7% would be the highest level in seven years, though Thai growth is lower than that of its regional peers, she said.
Growth should be supported by the tourism sector, with the research centre forecasting foreign arrivals of 38 million this year, up from 35.5 million in 2024, contributing tourism income of 1.69 trillion baht, compared with 1.5 trillion last year.
Chinese arrivals are expected to number 8-9 million, lower than the pre-pandemic level. In 2024, foreign arrivals from China totalled 6.7 million.
Ms Pimnara said the Bank of Thailand is expected to maintain its policy rate at 2% throughout the year after trimming the rate by 0.25 percentage points on Feb 26.
The recent rate cut should support the Thai economy and potentially increase growth, she said.
