Citi Thailand projects 3.2% GDP growth
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Citi Thailand projects 3.2% GDP growth

Investments set to rise sharply in 2025

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Nalin Chutchotitham, Director — Thailand and Philippines Economist at Citi Thailand, speaks at the ‘Bangkok Post’ Dinner Talk 2024. (Photo: Pattarapong Chatpattarasill)
Nalin Chutchotitham, Director — Thailand and Philippines Economist at Citi Thailand, speaks at the ‘Bangkok Post’ Dinner Talk 2024. (Photo: Pattarapong Chatpattarasill)

Citi Thailand is upbeat about the local economy in 2025, fuelled by domestic investments from both the public and private sectors, with tourism remaining a key driver of growth.

The bank projects that Thailand's gross domestic product (GDP) growth will reach 3.2% in 2025, up from the 2.7% forecast for 2024.

Prime Minister Paetongtarn Shinawatra, centre, and dignitaries at the ‘Bangkok Post’ Dinner Talk 2024 ‘Redefine Thailand: The Road To Prosperity’ yesterday at the Bangkok Convention Center, Centara Grand at CentralWorld. From left: Ruchanee Nopmuang, Adviser, Bangkok Bank Plc; David Li, Chief Executive Officer of Huawei Technologies (Thailand) Ltd; Onanong Pratakphiriya, Corporate Affairs and Engagement Director, L’Oreal Thailand; Chatit Huayhongtong, President, Chevron Thailand Exploration & Production Ltd; Donya Vongyai, Sales and Marketing Manager of EVA Airways; Ek-Rit Boonpiti, Executive Director of Bangkok Post Plc; Wissanu Krea-ngam, Chairman of the Board of Directors of Bangkok Post Plc; the Thai Prime Minister; Suthikiati Chirathivat, Chairman of the Executive Committee of Bangkok Post Plc; Worachai Bhicharnchitr, Vice Chairman of Bangkok Post Plc; Thirakiati Chirathivat, Executive Director of Bangkok Post Plc; Nalin Chutchotitham, Director of Thailand and Philippines Economist, Citi Thailand; Narumon Chivangkur, Citi Country Officer and Banking Head of Citi Thailand; Rachada Sermsillapakul, SVP, Strategic Marketing Communication & Public Relation Division, Siam Commercial Bank and; Suthipak Chirathivat, Executive Director of Central Group. (Photo: Pattarapong Chatpattarasill)

Prime Minister Paetongtarn Shinawatra, centre, and dignitaries at the ‘Bangkok Post’ Dinner Talk 2024 ‘Redefine Thailand: The Road To Prosperity’ yesterday at the Bangkok Convention Center, Centara Grand at CentralWorld. From left: Ruchanee Nopmuang, Adviser, Bangkok Bank Plc; David Li, Chief Executive Officer of Huawei Technologies (Thailand) Ltd; Onanong Pratakphiriya, Corporate Affairs and Engagement Director, L’Oreal Thailand; Chatit Huayhongtong, President, Chevron Thailand Exploration & Production Ltd; Donya Vongyai, Sales and Marketing Manager of EVA Airways; Ek-Rit Boonpiti, Executive Director of Bangkok Post Plc; Wissanu Krea-ngam, Chairman of the Board of Directors of Bangkok Post Plc; the Thai Prime Minister; Suthikiati Chirathivat, Chairman of the Executive Committee of Bangkok Post Plc; Worachai Bhicharnchitr, Vice Chairman of Bangkok Post Plc; Thirakiati Chirathivat, Executive Director of Bangkok Post Plc; Nalin Chutchotitham, Director of Thailand and Philippines Economist, Citi Thailand; Narumon Chivangkur, Citi Country Officer and Banking Head of Citi Thailand; Rachada Sermsillapakul, SVP, Strategic Marketing Communication & Public Relation Division, Siam Commercial Bank and; Suthipak Chirathivat, Executive Director of Central Group. (Photo: Pattarapong Chatpattarasill)

This positive outlook is driven by several factors, particularly the continued support from fiscal budget disbursements this year, which will help sustain economic momentum into the next year, said Nalin Chutchotitham, Director -- Thailand and Philippines Economist at Citi Thailand, during the Bangkok Post Dinner Talk 2024 on Thursday.

With this scenario, the bank projects Thailand's private investment growth rate to be 4.4% in 2025, a significant recovery from the 1.8% contraction forecast for 2024. The stronger growth is expected to be driven by the realisation of investment applications approved by the Board of Investment (BOI) between 2023 and 2024.

"Thailand's investment outlook will show upward momentum. The value of BOI-approved investments in 2023 and the first three quarters of 2024 remains strong, supporting further realised investments, particularly in digital sectors such as data centres, electric vehicle-related industries, and electronics," Ms Nalin said.

From left: Ek-Rit Boonpiti, Executive Director of Bangkok Post Plc; Wissanu Krea-ngam, Chairman of the Board of Directors of Bangkok Post Plc; Prime Minister Paetongtarn Shinawatra; Suthikiati Chirathivat, Chairman of the Executive Committee, Bangkok Post Plc; Worachai Bhicharnchitr, Vice Chairman of Bangkok Post Plc; Thirakiati Chirathivat, Executive Director of Bangkok Post Plc; and Nalin Chutchotitham, Director — Thailand and Philippines Economist at Citi Thailand. (Photo: Pattarapong Chatpattarasill)

From left: Ek-Rit Boonpiti, Executive Director of Bangkok Post Plc; Wissanu Krea-ngam, Chairman of the Board of Directors of Bangkok Post Plc; Prime Minister Paetongtarn Shinawatra; Suthikiati Chirathivat, Chairman of the Executive Committee, Bangkok Post Plc; Worachai Bhicharnchitr, Vice Chairman of Bangkok Post Plc; Thirakiati Chirathivat, Executive Director of Bangkok Post Plc; and Nalin Chutchotitham, Director — Thailand and Philippines Economist at Citi Thailand. (Photo: Pattarapong Chatpattarasill)

Public investment growth is also expected to rise to 2.9% next year, compared to 1.6% this year. This follows delayed budget disbursements in 2023–2024, which postponed infrastructure project investments. However, with the 2025 fiscal budget approved on schedule, investment is expected to ramp up next year.

Meanwhile, government consumption is projected to grow by 3.1% in 2025, up from 2.7% this year, while private consumption growth is expected to slow to 3.5% from 4.4%. Although private consumption has continued to rebound, the recovery has been uneven across different sectors, Ms Nalin said.

According to Ms Nalin, strong employment in the service sector continues to support household income and spending. However, the manufacturing sector, particularly automobile, remains affected by the uneven recovery, leading to sluggish car sales amid the country's high household debt.

Prime Minister Paetongtarn sits at dinner with Suthikiati Chirathivat, Chairman of the Executive Committee, Bangkok Post Plc. (Photo: Pornprom Satrabhaya)

Prime Minister Paetongtarn Shinawatra sits at dinner with Suthikiati Chirathivat, Chairman of the Executive Committee, Bangkok Post Plc. (Photo: Pornprom Satrabhaya)

She also noted that the tourism sector will remain a key driver of economic growth next year, with foreign tourist arrivals expected to rise to 41 million, up from the 36.5 million projected for 2024. However, spending by foreign tourists has declined, partly due to changing behaviour.

Meanwhile, Thailand's goods exports in US dollar terms are expected to grow at a slower pace of 2.8% in 2025, compared to 4.6% in 2024. This softer growth is attributed to heightened global uncertainties, particularly a slowdown in global trade amid rising tensions between the United States and China, as well as potential tariff hikes under the new US president, Donald Trump.

In addition, she said the decoupling of trade and tech supply chains between the US and China could lead to potential spillover effects, including systematic tariffs on China and key emerging economies. As a result, higher uncertainties are expected in the coming year, Ms Nalin noted.

Moreover, Ms Nalin forecasts that the Bank of Thailand (BoT) will maintain its current neutral monetary policy stance to preserve policy space and support debt deleveraging in the household sector. Citi Thailand expects the BoT's Monetary Policy Committee to begin cutting the policy rate by 0.25 percentage points in the first quarter of 2025 if the economic recovery falls significantly short of expectations.

"The Thai GDP growth rate is expected to remain around 3% in the medium term. We hope to see further progress on reform initiatives aimed at boosting the economy's competitiveness and fiscal revenues, such as improvements in the ease of doing business and additional fiscal reforms," Ms Nalin said.

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