# ​World Bank downgrades Thailand’s 2025 GDP growth forecast from 2.9% to 1.6%

- Link: https://www.thailand-business-news.com/economics/214382-world-bank-downgrades-thailands-2025-gdp-growth-forecast-from-2-9-to-1-6
- Published: 2025-04-30T12:56:30+07:00
- Author: Nguyen Trang

The World Bank has recently downgraded Thailand’s 2025 GDP growth forecast from 
2.9% to 1.6%, marking the lowest projection among ASEAN nations. This significant
revision has prompted discussions among Thai officials and economists regarding 
its implications and the country’s economic trajectory.

## Reasons for the Downgrade

 * **Global Trade Slowdown**: Thailand’s export-driven economy is facing headwinds
   due to a deceleration in global trade, affecting demand for its goods and services.
 * **Delayed Fiscal Budget Disbursement**: Internal delays in government spending
   have hindered economic momentum, impacting public investment and consumption.(
   [World Bank cuts Thai growth forecast – Bangkok Post](https://www.bangkokpost.com/business/general/2769199/world-bank-cuts-thai-growth-forecast?utm_source=chatgpt.com))
 * **High Public Debt**: The country’s public debt is projected to reach 64.6% of
   GDP by 2025, raising concerns about fiscal sustainability and limiting the government’s
   ability to implement expansive fiscal policies.

## Government’s Response

Deputy Finance Minister Julapun Amornvivat has labeled the World Bank’s downgrade
as “premature,” emphasizing the need to assess the impact of U.S. reciprocal tariff
measures and ongoing trade negotiations before drawing firm conclusions. He acknowledged
that the Finance Ministry might adjust its own growth target, currently set at 3%,
with updated figures to be announced soon. ([World Bank’s slashing of Thailand GDP forecast to 1.6% is premature](https://www.nationthailand.com/business/economy/40049358?utm_source=chatgpt.com))

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### Economic Stimulus Measures

The Thai government is considering the implementation of a “Digital Wallet” program,
aimed at boosting private consumption. This initiative is expected to contribute
between 0.5 to 1.6 percentage points to GDP growth over a two-year period. However,
uncertainties regarding the program’s funding and legality have led to its exclusion
from the World Bank’s baseline projections.

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Despite the potential economic benefits, the Thai government faces challenges in
addressing concerns over the program’s financial sustainability and legal framework.
Critics argue that without clear funding sources and regulatory guidelines, the 
initiative could face delays or modifications.

## Outlook and Considerations

As the global economy faces uncertainties, Thailand’s reliance on tourism and domestic
consumption could serve as pivotal drivers for economic resilience. The government
is exploring targeted fiscal policies and structural reforms to address vulnerabilities
and strengthen the economy. By fostering a conducive environment for investment 
and innovation, Thai officials aim to enhance productivity and competitiveness in
key sectors. Additionally, efforts to diversify the economic base and improve infrastructure
are underway, ensuring that Thailand is better positioned to weather future economic
storms and sustain long-term growth.