The World Bank has downgraded Thailand’s economic growth forecast for 2025 to just 1.8%, a sharp 1.1% cut from its earlier projection.
Key takeaways
- The World Bank has slashed Thailand’s 2025 GDP growth forecast to 1.8%, citing global uncertainties and natural disasters.
- Global economic growth is now projected at 2.3% for 2025, the slowest pace since 2008 outside of a global recession.
- Rising trade tensions, especially from U.S. tariff hikes, are weighing heavily on emerging markets like Thailand.
The revision reflects mounting global uncertainties, weakening trade dynamics, and the impact of natural disasters that have disrupted economic activity across several emerging markets, including Thailand.
The new figures were released in the World Bank’s latest Global Economic Prospects report, which paints a gloomy outlook for both the Thai and global economies.
Globally, the Bank now projects economic growth to slow to 2.3% in 2025, down from the previous estimate of 2.7%. If realized, this would represent the slowest pace of global growth since 2008, excluding the COVID-induced global recession.
The World Bank attributed the slowdown to ongoing geopolitical tensions, protectionist trade policies, and economic disruptions caused by natural disasters such as recent earthquakes.
These headwinds are placing significant pressure on emerging markets and developing economies (EMDEs), including Thailand, which relies heavily on exports and tourism.
The Bank also revised down its 2025 growth projections for other major economies:
- United States: forecast cut by 0.9 percentage points to 1.4%
- Eurozone: trimmed by 0.3 percentage points to 0.7%
Trade frictions, particularly those stemming from recent tariff hikes by the U.S. President Donald Trump, have fueled global economic uncertainty.
Negotiations are currently underway between the U.S. and key trading partners, including China and the European Union, in an effort to avoid a broader trade conflict ahead of the expiration of several key truce agreements next month.
According to the report, if current tariff levels are halved through successful trade negotiations by the end of May 2025, global growth could rebound modestly by approximately 0.2% during 2025–2026.
Thailand has already been facing downward pressure on exports, prompting domestic institutions like the National Economic and Social Development Council (NESDC) to also lower their growth projections earlier this year.
With global instability threatening to erode growth prospects further, economists warn that Thailand’s recovery may hinge on the resolution of international trade disputes and effective domestic policy responses to buffer the economy from external shocks.
