Thailand’s second-quarter growth seen slowing sharply as weak consumption weighs: Reuters poll
People stand on the road as cars drive through the traffic in the Thai capital in Bangkok, Thailand, March 28, 2025. REUTERS/Athit Perawongmetha
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BENGALURU, Aug 13 : Thailand’s economic growth likely slowed sharply in the second quarter, while the economy contracted on a quarterly basis, a Reuters poll of economists showed, as subdued household consumption offset support from exports and private investment.
Southeast Asia’s second-largest economy likely expanded 1.7 per cent in the April-June quarter from a year earlier, slowing from 2.8 per cent growth in the previous quarter, according to the median estimate in an August 7-12 poll of 15 economists.
Forecasts for data, due on August 17, ranged from 0.9 per cent to 2.2 per cent.
On a seasonally adjusted quarter-on-quarter basis, gross domestic product (GDP) was expected to contract 0.6 per cent, according to the median estimate of a smaller sample of economists.
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“Private consumption was likely (to) be the main drag. The oil shock rippled through costs across a wide range of goods and services, especially transportation. As a result, households have likely grown more cautious about spending,” said Eugene Tan, associate economist at Moody’s Analytics.
High household debt and an ageing population were also expected to constrain consumer spending despite government fiscal measures aimed at supporting demand, economists said.
Tourism, a vital pillar of Thailand’s economy, was also unlikely to provide much relief. Foreign arrivals were down 3.2 per cent year-on-year as of August 1, limiting the sector’s ability to offset weak domestic demand.
“An ageing population is slowing labour-force growth, while weak productivity, skills mismatches and high household debt constrain both investment and domestic consumption,” said Chamadanai Marknual, economist at Krungthai Bank.
“Tourism was a weaker contributor to Q2 growth… International arrivals were affected by geopolitical uncertainty, higher travel costs and softer purchasing power in some major source markets.”
Still, private investment, particularly in electronics and artificial intelligence infrastructure, was expected to cushion the slowdown.
“Private investment has risen steadily, fueled by the AI boom. Much of this growth stems from spending on technology infrastructure, such as AI servers and data centres,” Moody’s Tan added.
Exports were also likely to support growth, although economists said the boost could fade in the second half after shipments were front-loaded earlier in the year.
Thailand’s exports rose 20.8 per cent in June from a year earlier and 17.6 per cent in the first half of 2026, Commerce Ministry data showed.
The ministry expects export growth to slow in the second half of the year after strong shipments earlier in 2026.
Thailand’s economy was expected to grow 2.4 per cent in the third quarter and 2 per cent in 2026, according to a Reuters poll last month. The Bank of Thailand forecast 2.3 per cent growth for the year.
Source: Reuters
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