Thailand’s household spending is expected to grow by 4.0% in 2025, supported by easing inflation and a stable labor market, despite ongoing political instability affecting consumer confidence and retail sales.
Key View: Total household spending growth in Thailand will be moderate but positive in 2025. Although easing inflationary pressures and a stable labour market will form the base for stable consumer spending, high-frequency data indicate that the trajectories for consumer confidence and retail sales growth will continue to be sluggish as political instability continue to cast uncertainty on the economic climate.
Consumer Spending Outlook For 2025
We maintain a positive outlook for consumer spending in Thailand throughout 2025, as growth continues in sectors such as retail, hospitality, tourism and gastronomy. Real household spending (calculated at 2010 prices) is projected to grow by 4.0% y-o-y, accelerating from the 3.5% estimated for 2024 as consumer spending continues to stabilise with the volatility witnessed from 2020 to 2023, induced by Covid-19 lockdowns and a subsequent remarkable recovery subsiding. In total, we anticipate spending to exceed THB9.6trn (in 2010 terms) in 2025, supported by a favourable macroeconomic environment.
Given the Bank of Thailand’s prospective policy to ease rate hikes in December 2024, in response to ongoing tussle between the government and the central bank on policy rate decisions in recent months, we expect spending levels to remain supported over the year. Total spending in 2025 will also exceed the 2019 pre-pandemic levels, suggesting that 2025 will remain crucial for the market’s medium-term recovery outlook.
Thailand’s consumer outlook reflects a mixed yet stable trajectory for the medium term, driven by several macroeconomic factors. With a GDP growth forecast that stabilizes around 3-4%, the country has seen increasing consumption rates buoyed by remittances and tourism recovery post-pandemic. Additionally, government stimulus measures and investments in infrastructure are expected to further enhance consumer confidence.
However, the landscape is marred by political instability, which poses significant challenges to short-term economic prospects. Recent protests and uncertainties regarding the government’s direction can undermine consumer and investor sentiment, affecting spending habits. While the Thai electorate appears prepared for upcoming elections, the political climate remains unpredictable and may hinder the momentum built from recent economic gains.
Despite these challenges, the long-term outlook remains hopeful, fueled by Thailand’s strong export sector and potential trade agreements. Addressing political uncertainties will be crucial for sustaining consumer confidence and ensuring steady economic growth in the years to come.
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