Two leading research centres expect the recent earthquake to result in economic losses of 20-30 billion baht in Thailand over the coming months.
Yunyong Thaicharoen, chief economist at the SCB Economic Intelligence Center (EIC), a research unit of Siam Commercial Bank, said the disaster is forecast to result in an economic loss of around 30 billion baht over the next 3-4 months.
“Following Friday’s earthquake, the disaster will primarily affect Thailand’s tourism sector. In particular, foreign tourist arrivals are expected to decline by about 400,000 this month, with a recovery to normal levels taking around three months,” he said on Tuesday at a seminar on the domestic economic and consumer finance outlook hosted by Fitch Ratings Thailand.
Given this scenario, EIC plans to downgrade its 2025 international tourist arrival forecast from 38.2 million. The quake has led to partial delays and cancellations of flights and hotel bookings by foreign visitors to Thailand.
Meanwhile, weakened confidence among condominium buyers, particularly in the high-rise segment, is likely to lead to delays in purchases and property transfers. As a result, EIC has adjusted its forecast for residential transfers in Bangkok and the metropolitan area, now predicting a 1% year-on-year contraction for 2025, instead of the previously anticipated marginal growth.
In addition, Mr Yunyong said the earthquake would weaken consumer and business confidence, particularly affecting spending and investment in durable goods. This downturn is expected to further constrain loan growth in the banking sector.
Thailand’s household debt-to-GDP ratio declined slightly to 88.4% in the fourth quarter of 2024, from 89% in the previous quarter. The reduction reflects tighter financial conditions, debt deleveraging and weaker loan demand.
According to Kasikorn Research Center (K-Research), the economic loss from the earthquake is estimated at no less than 20 billion baht, equivalent to a dip of 0.06 percentage points in GDP based on initial assessments.
Key factors contributing to the loss include disruptions to business activity, delays in economic operations, and a decline in purchasing power, as households and businesses allocate resources toward damage assessments and repairs.
Regarding the banking sector, financial assistance measures are expected to stabilise overall credit quality, particularly in real estate, construction and mortgage lending.
However, K-Research notes that the earthquake may affect corporate bond redemptions by affected businesses later this year and could prompt domestic interest rate cuts amid weaker economic growth.
EIC and K-Research forecast Thai GDP growth for 2025 of 2.4% and 2.3%, respectively.
Deputy Finance Minister Paopoom Rojanasakul, meanwhile, said he expected the economic impact from the quake would be limited and short-lived. He believes gross domestic product remains on track to reach the 3% target for the year.
