Thailand’s finance minister says he wants to beat government forecast of 3% growth in 2025

BANGKOK: Thailand’s economic growth rate is expected to rise to 3 percent in 2025, supported by spending, exports, investment and tourism, the government said on Thursday, and the finance minister said he was already working to beat that forecast.

Southeast Asia’s second-largest economy is seen growing by 2.7 percent this year, the Finance Ministry said, a solid increase from a moderate 1.9 percent expansion in 2023.

“The growth trend is still ongoing. The government is trying everything to stimulate the economy,” Finance Minister Pichai Chunhavajira told reporters at a business event.

“We hope that next year it will come closer to its potential, which is close to 3.5%.”

The government was also planning 55 billion baht ($1.6 billion) in soft loans to support the housing market, he added.

The growth forecasts come two weeks after the Bank of Thailand unexpectedly cut its key interest rate, something the government has called for all year as needed to support expansionary fiscal policy and jump-start economic activity.

“Monetary policy must play a role in economic expansion,” Pornchai Thiraveja, head of the finance ministry’s fiscal policy office, told a news conference.

“There is limited fiscal space … to grow by 3.5 percent, we need to consider quasi-fiscal measures,” he said when asked what was needed to beat the 2025 growth forecast.

The ministry said annual GDP growth in the third quarter is expected to fall below 3 percent, but will accelerate to above 4 percent in the final quarter of 2024.

Separately, the BOT said the economy lost pace in September from August after exports and private consumption slowed, but overall growth in the July-September period picked up from the previous quarter.

Third quarter GDP data is available on November 18.

The baht’s strength against the dollar this year has raised concerns about the impact on export competitiveness and tourism. The ministry saw the baht averaging between 34.8 and 35.4 per dollar this year and between 32.7 and 33.1 per dollar next year.

Tourist arrivals are expected to reach 36 million this year and then 39 million in 2025, surpassing the record of nearly 40 million visitors set in 2019. Exports this year rose 2.9 percent, more stronger than previous forecasts of 2.7% and then 3.1% in 2025.

Earlier this week, the Ministry of Finance and the BOT agreed to maintain the current inflation target of 1% to 3% for next year.

($1 = 33.71 baht)