World Bank Cuts Thailand Growth Outlook to 1.8% Amid Export Tourism Slump

The World Bank has sharply revised down Thailand's economic growth forecasts to 1.8% for 2024 and 1.7% for 2025, citing weaker exports, a slowdown in tourism—especially fewer arrivals from China—and weak domestic demand. The tourism sector's recovery is delayed, with foreign arrivals expected to reach 37.4 million this year and pre-pandemic levels not anticipated until mid-2026. Political uncertainty following the suspension of Prime Minister Paetongtarn Shinawatra could delay the 2026 fiscal budget and hamper public infrastructure investments, potentially affecting private sector confidence and overall growth. Inflationary pressures are easing, and the World Bank expects Thailand's monetary policy to become more accommodative in 2025, with the Bank of Thailand having already cut interest rates recently. Additionally, Finance Minister Pichai Chunhavajira has warned that U.S. tariffs, including a potential 36% levy on Thai imports if trade talks fail, may further constrain growth, possibly limiting expansion to just over 1% this year. These combined global and domestic challenges have led to Thailand's economic output lagging behind regional peers.