World Bank Ups Thai Growth Forecast Despite Political Risk
The Bank raises 2025 GDP projection to 2.0% but warns that trade restrictions and political uncertainty pose severe threats to spending
- The World Bank has increased its 2025 GDP growth forecast for Thailand to 2.0%, up from a previous estimate of 1.8%.
- Despite the upgrade, the report highlights that persistent political uncertainty remains a significant risk that could stifle consumer spending and investment.
- Thailand's optimistic revision is notable as the broader East Asia and Pacific region is expected to experience a general slowdown in growth.
The World Bank has revised its growth forecast for the Thai economy (GDP) for 2025, raising the projection to 2.0%. The Bank expects growth to slow slightly to 1.8% in the following year.
The 2.0% forecast for 2025 is an increase from the earlier estimate of just 1.8% made in July. However, the Bank’s report highlights persistent risks from political uncertainty, which could stifle consumer spending and overall investment.
This optimistic adjustment for Thailand comes as the broader East Asia and Pacific (EAP) region faces a general slowdown in growth.
Speaking at a press briefing for the October 2025 edition of the East Asia and Pacific Economic Update on Tuesday, Aaditya Mattoo, the World Bank’s Chief Economist for the region, noted that the high growth seen over the last three decades in the EAP is now trending downwards.
Regional growth is forecasted at 4.8% this year and 4.3% next year, a decline from 5.0% last year.
The five largest economies in ASEAN (ASEAN-5)—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—are expected to grow at 4.6% this year and 4.5% next year, significantly slower than 2024.
Mattoo attributes the reduced growth to three key external factors: mounting trade restrictions, increasing global trade policy uncertainty, and slower overall global economic growth. Internal factors include domestic economic policy and the need for structural adjustments.
He pointed specifically to the increase in US import tariffs, which is making exports from trade-dependent ASEAN nations more challenging.
Uncertainty is compounded by tariffs on goods suspected of circumventing Chinese duties, as the US has yet to disclose clear criteria for enforcement.
This instability has a tangible effect: Mattoo estimated that a 1 percentage point drop in growth among the G7 industrialized nations could reduce the EAP region’s growth by as much as 0.6%.
The Paradox of Thai Labour
The report finds that while Thailand maintains a high overall employment rate (over 90% of the labour force), workers aged 15 to 24 struggle to enter the job market.
A key structural challenge is that 60% to 70% of Thailand’s working-age population are employed in low-productivity roles, many within the informal sector. Mr. Mattoo stressed that governments need to urgently address this by developing workforce potential.
Furthermore, while the region’s middle class is expanding, the number of vulnerable people at risk of falling below the poverty line is also increasing due to structural changes, automation, and a lack of firm dynamism.
