World Bank cuts Thailand growth outlook
The growth forecasts were reduced sharply from the 2.9% and 2.7% rates projected in February. Gross domestic product last year expanded by 2.5%, lagging most Asian 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 has been slower than forecast, with foreign arrivals expected to reach 37.4 million this year, down marginally from last year, and only returning to pre-pandemic levels by the second quarter of 2026, the report said.
Internally, political uncertainties could delay the 2026 fiscal budget and hold back investments in public infrastructure, causing spillovers into private investment and overall growth, the global lender said.
The Constitutional Court on Tuesday suspended Prime Minister Paetongtarn Shinawatra from duty pending a case seeking her dismissal on ethics grounds following the embarrassing leak of her phone conversation with former Cambodian premier Hun Sen.
The World Bank also sees more room for the Bank of Thailand to cut interest rates to spur the sluggish economy.
'With rising domestic and external uncertainty, as well as falling inflationary pressure, the monetary stance is projected to become more accommodative in 2025,' it said.
The Bank of Thailand has cut its key interest rate by a cumulative 75 basis points since October to 1.75% to cushion the blow to the economy from the fallout of global trade tensions and an uncertain growth outlook. It has also left the door open for further easing.
Finance Minister Pichai Chunhavajira said earlier that the economy could expand by just over 1% this year due to the impact of US tariffs.
Mr 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.
Despite all the challenges Thailand faces, growth could hit 2.2% this year if trade tensions cool and private investment grows moderately, the World Bank said.
Domestically, effective implementation of fiscal stimulus and high-quality infrastructure investment could support growth, according to the report.
The World Bank said digital technology can be a catalyst for Thailand's growth and create more jobs, deliver better services and boost productivity in the face of uncertainty.
The nation's digital economy is estimated to contribute around 6% of gross domestic product and is the second-largest in Southeast Asia. Financial services, digital payments, fintech and software and engineering industries, have seen some of the fastest rates of job creation over the past decade, according to the report.
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Bangkok Post
3 hours ago
- Bangkok Post
Thai government under pressure
The opposition is stepping up pressure on the government, with the People's Party calling for the appointment of an interim prime minister and dissolution of the House before the end of the year to prevent political deadlock. In a statement released on its official Facebook page on Thursday, the main opposition party outlined several conditions for it to support a new leader, if Prime Minister Paetongtarn Shinawatra is removed by the Constitutional Court over the leaked recording of her conversation with Cambodian Senate President Hun Sen about the ongoing border dispute. She is currently suspended from duty, pending the court's ruling. The party said the new prime minister must agree to dissolve parliament by the end of the year and commit to resolving the pressing political, economic and security challenges facing the country. Not only should the next government be legitimate in the eyes of the law and trusted by the public, but it must also be led by competent individuals, instead of being formed through political bargaining, the statement added. The party noted that, as the current parliament can't produce a government with these qualities, a fresh general election must be called in order to form a competent and legitimate administration. In the statement, the party called on acting prime minister Phumtham Wechayachai to use his authority to return power to the people. The party also reiterated that it will remain in the opposition until a new election is held, and that it won't join the government or accept any ministerial positions until its conditions are met. Before parliament is dissolved, the PP said a referendum on setting up a Constitution Drafting Assembly (CDA) to amend the charter must be held. At the same time, the interim government should make an effort to urgently de-escalate the ongoing border dispute with Cambodia and ensure the passage of essential economic stimulus measures to help the public deal with the cost-of-living crisis, it added. If the candidate fails to follow through, then the party and its 142 MPs will use all parliamentary mechanisms available to immediately bring down the government, it warned. The statement highlights the party's effort to strike a balance between preventing a constitutional deadlock and maintaining its role as a principled opposition. It also reflects growing pressure on the fragile coalition government amid rising calls for new elections and political reform. On Thursday, PP leader Natthaphong Ruengpanyawut met representatives from other opposition parties on the first day of the new parliamentary session. It was the first time he had welcomed Bhumjaithai Party leader Anutin Charnvirakul to the opposition in person. Mr Natthaphong said the discussion he had with other opposition members focused on ways to respond to the current political situation and the deepening crisis of confidence in the current government. The opposition unanimously agreed to push back against the government's heavily criticised casino-entertainment complex bill. They demanded that the government withdraw the bill and commit not to reintroduce it. Mr Natthaphong added that the bloc supports initiating a referendum to be organised to gauge public support for the establishment of the CDA. The process hinges on a pending Constitutional Court ruling regarding the amendment of Article 256, which would allow the CDA's creation. As for the no-confidence debate against the government proposed by Bhumjaithai, the decision will depend on the outcome of the Constitutional Court's ruling on Ms Paetongtarn's legal standing. Mr Anutin, meanwhile, clarified reports about him nominating himself as a prime minister candidate, calling them "a significant misunderstanding".
Bangkok Post
4 hours ago
- Bangkok Post
Thai politics back at the brink (again)
The Constitutional Court's suspension of Paetongtarn Shinawatra from the premiership is déjà vu, exposing a pattern of systematic manipulation and concoction of political outcomes. After so many dissolutions of leading political parties and repeated bans of elected representatives over two decades, it is time to call a spade a spade. Thailand is a faux democracy. Its core foundations constitute an autocratic regime that does not really care about the country's future and the collective will of its people. This is not to say that Ms Paetongtarn was not in the wrong. Her leaked audio clip with Cambodia's former Prime Minister and Senate President Hun Sen was damning and damaging, whereby she compromised her position and Thailand's national interest by catering to the Cambodian strongman in a misguided attempt to defuse border tensions between the two sides. But having a group of senators from a dubious chamber petition a nine-member Constitution Court to go after her is questionable in itself. The 200-member senate has been hounded by allegations of collusion and vote-rigging, in which the Bhumjaithai Party is accused of gaming and manipulation in the senatorial election in June last year, when the upper chamber was picked from internal nomination processes at local, provincial, and national levels. It must be noted that the Constitutional Court on 1 July dismissed a petition against the Bhumjaithai Party as well as poll staff in the controversial senate election. Although the court has dismissed a petition that called out the controversial senate, questions linger in the minds of many about the integrity of the upper chamber. If this judicial assertiveness takes place as a one-off or once in a while, then we could overlook and consider it as due process in a passable legal and constitutional system. But when political parties and prime ministers are suspended and kicked out after every election for 20 years, something is not right with the democracy. Ms Paetongtarn is the sixth of such suspensions, although her removal or acquittal is still pending. Preceding her as suspended prime ministers were Samak Sundaravej, Somchai Wongsawat, Yingluck Shinawatra, Gen Prayut Chan-o-cha, and Srettha Thavisin. All of them, except Gen Prayut, were members of the Shinawatra clan, headed by Thaksin Shinawatra. Except Gen Prayut, who was suspended but later allowed to continue in the premiership, all others were booted out by the court or a military coup. Gen Prayut himself led the coup in 2014. To be sure, this is not just about the Shinawatra clan and Mr Thaksin, who is fighting charges of royal defamation and criminal violation of his jail conditions after returning from 15 years of self-imposed exile. We tend to forget because memories are short around here due to the constant political drama that keeps unfolding. Controversial charges about minor and obscure media shareholdings also led to the dissolution and removal of the Future Forward Party and its leader, Thanathorn Juangroongruangkit, in November 2019. Future Forward's successor, the Move Forward Party, and its leader, Pita Limjaroenrat, faced a similar fate after becoming the largest winner in the May 2023 poll. True, Mr Thaksin's enemies have been going after him and his clan because he indelibly and unwittingly opened up the Thai political system by awakening the rural masses and because he engaged in conflicts of interest and corruption in the process. But the forces that can seize power, impose long bans on elected representatives, and get rid of political parties are focused on the threat of the day and of the era, not just the Shinawatras. Now, we should be wondering that putting Ms Paetongtarn in limbo, even while she continues as culture minister after a cabinet reshuffle that preceded her suspension, will create conditions of political intractability and policy paralysis to frustrate the Thai public into calling for an extra-parliamentary intervention to end the manufactured deadlock. We have seen this kind of drama before in 2005-06, 2008, and 2023-14, when street demonstrations paved the way for either a military coup or a judicial intervention to determine political outcomes. What we do know is that Thailand has regressed internationally and economically over the past two decades because of its political standstill and autocratic preferences. In the interim, Thailand's political environment will be precarious and volatile. Clearly, the so-called "super deal" that brought Mr Thaksin back from exile was believed to keep Move Forward out, not to move Thailand forward under a Shinawatra-led government. Otherwise, Mr Thaksin would not have been put on legal leashes early on, and Ms Paetongtarn would not have landed in the political deep end today. With the court's 7-2 suspension decision and 9-0 to accept the case, her political survival appears doubtful. Even if the court returns a favourable verdict, Ms Paetongtarn will be hard pressed to continue in office in the face of street protests led by a conservative coalition comprising her father's enemies, an opposition grilling in parliament by both Bhumjaithai and Move Forward's successor, the Prachachon (People's) Party, the economic doldrums, and souring public sentiment. Ms Paetongtarn may be seen as a spent force, and her political longevity in the remaining two years of the current parliamentary term looks unlikely. Given that Thailand will always have a national assembly in place, it is still useful to anticipate what type it will be. If the current assembly stays without Ms Paetongtarn because of her expulsion, then a new prime minister will be chosen from the pre-election party lists of nominees. Bhumjaithai's leader, Anutin Charnvirakul, would have a good shot despite his party holding just half of the strength of Pheu Thai's 140 MPs. Pheu Thai's last eligible candidate is Chaikasem Nitisiri. On the other hand, a newly elected assembly would require a new poll. Ms Paetongtarn cannot dissolve the lower house while under suspension, and it is unclear whether acting PM Phumtham Wechayachai can opt for a snap poll. An appointed assembly would normally follow a military takeover. As Thai politics becomes murkier and governance more unruly, the prolonged political vacuum and ineffectual government will likely stoke conservative calls for a military takeover to end the morass and volatility. The risk of such intervention has risen visibly in view of Ms Paetongtarn's suspension, coalition squabbling, government uncertainty, and policy weakness and inertia, including the tariff negotiations with President Donald Trump's trade team and Thailand's budget bill for the next fiscal year from Oct 1. In truth, Thailand finds itself in a messy situation under a fragile democratic system and an entrenched autocracy, not out of randomness and pure chance. Thitinan Pongsudhirak is professor at Chulalongkorn University's Faculty of Political Science and a senior fellow at its Institute of Security and International Studies in Bangkok.
Bangkok Post
4 hours ago
- Bangkok Post
Greater Bangkok property demand surges in Q1
Confidence among prospective homebuyers in Greater Bangkok surged in the first quarter of this year, reaching its highest level since tracking began in the fourth quarter of 2023, driven by interest rate cuts and the temporary easing of loan-to-value (LTV) rules. The Real Estate Information Center (REIC) reported that the housing purchase confidence index (HPCI) in Greater Bangkok rose to 51.7 in the first quarter of 2025, surpassing the neutral benchmark of 50 for the first time. This marks a 12.5-point year-on-year increase, from 39.2, and an 8.8-point rise from 42.9 in the fourth quarter of 2024. The rebound in sentiment was supported by a cut in the Bank of Thailand's policy rate from 2.25% to 2.00% on Feb 26, which lowered monthly mortgage payments and improved affordability for buyers. Banks also rolled out low-interest housing loans early in the year, while the central bank announced on March 20 a temporary relaxation of LTV rules, effective from May 1, 2025 to June 30, 2026, further boosting purchasing sentiment. REIC found that the share of respondents planning to buy a home within one year jumped to 61.1%, up from 50.8% a year earlier. The data was collected through online and offline surveys of over-18s at housing expos and on the REIC website. Most survey respondents were women (62.1%), aged 25–34 (47.4%), holding a bachelor's degree (66.4%), and working in the private sector (61.6%). Around one-third earned between 30,001 and 50,000 baht monthly. The biggest reason for purchasing property was cited as being for the buyer's own residence (30.5%), followed by acquiring property as an asset (15.2%), and improving travel convenience (12.6%). Investment demand declined significantly to 10.3%, from 18.4% last year. The preference shifted notably towards new properties, with 46% indicating an intent to buy only new homes, up from 38.9%. Interest in secondhand homes dropped to 4.3%, from 8.3% a year earlier. Single detached houses remained the most sought-after property type, capturing 41.2% of demand, particularly in the 3.01–5 million baht range. Condos and townhouses followed in popularity. In terms of budget, 83.2% of respondents sought homes priced under 5 million baht. The most desired price bracket was 2.01–3 million baht, accounting for 25.1% of responses. Non-provincial Bangkok city continued to dominate location preferences with 59.9% of demand, particularly in areas with easy access to workplaces like Bang Na, Bang Kapi, and Lat Phrao. Demand from younger generations led by Gen Y and Z is continuing to drive the market. However, interest in condos has declined across all age groups, except for buyers aged 55 and older, who leaned towards condo investment.
