BANGKOK (Reuters) -Thailand’s economic growth is projected to slow to 1.8% this year and 1.7% next year amid intensifying global and domestic headwinds, the World Bank said on Thursday.
The growth forecasts were reduced from the 2.9% and 2.7%projected in February, respectively. Last year’s GDP growth stood at 2.5%, lagging peers.
The slowdown reflects weaker exports and tourism, particularly due to a decline in arrivals from China, as well as weak domestic demand, the World Bank said in its Thailand Economic Monitor report.
The recovery in tourism was slower than earlier forecast, with foreign tourist arrivals expected to reach 37.4 million this year and only returning to pre-pandemic levels by the second quarter of 2026, the World Bank said.
Internally, political uncertainties could delay next year’s fiscal budget and hold back investments in public infrastructure, causing spillovers into private investment and overall growth, the global lender said.
Thailand’s Constitutional Court on Tuesday suspended Prime Minister Paetongtarn Shinawatra from duty pending a case seeking her dismissal.
“With rising domestic and external uncertainty, as well as falling inflationary pressure, the monetary stance is projected to become more accommodative in 2025,” the World Bank said.
Finance Minister Pichai Chunhavajira said earlier that Southeast Asia’s second-largest economy could expand by just over 1% this year due to the impact of U.S. tariffs.
Pichai is in the United States for trade talks this week. Washington has threatened to impose a 36% levy on imports from Thailand if a reduction cannot be negotiated before July 9, when a 90-day pause capping tariffs at a baseline of 10% for most nations expires.
(Reporting by Orathai Sriring and Thanadech Staporncharnchai; Editing by David Stanway)
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