Thailand’s economy faced challenges in June, marked by declines in merchandise exports, manufacturing output, and tourism activities. Key issues include ongoing U.S. tariff negotiations, regional economic shifts, evolving tourism patterns, the impact of flooding, and the effectiveness of government stimulus measures.
Summary
- The Thai economy in June softened from the previous month, as merchandise exports and manufacturing declined following previous acceleration. Tourism-related activities also decreased, driven by lower tourist arrivals.
- Merchandise exports decreased, especially in technology and automotive products, following earlier acceleration.
- Manufacturing production decreased, led by reductions in automotive and food production, in line with weaker car sales and subdued domestic demand, respectively.
- Tourism sector weakened, due to a decrease in foreign tourist arrivals, although Chinese tourist numbers slightly improved.
- Key Issues to Monitor: 1) tariff negotiation with the U.S. 2) Thailand and Cambodia situation, 3) tourism sector trends 4) impacts of Northen flood, and 5) effects of government stimulus measures
The Thai economy in June experienced a slowdown compared to the previous month, as merchandise exports and manufacturing production weakened after earlier growth. Tourism-related activities also contracted, reflecting a decline in both the number of foreign tourists and their spending. Private consumption dropped across most categories, weighed down by a continued decline in consumer confidence. However, government expenditure increased, supported by higher disbursements from the central government and investments by state-owned enterprises. Additionally, private investment showed growth, driven by higher spending on machinery and equipment.
On the economic stability front, headline inflation became less negative compared to the previous month, primarily due to higher fresh food prices, particularly vegetables. Energy inflation also moderated, reflecting an increase in domestic retail oil prices in line with crude oil prices. Core inflation remained stable, with lower prices for cooking ingredients and prepared foods offset by higher prices for ready-to-eat meals. The current account balance returned to a surplus, mainly driven by a narrower deficit in the services, income, and transfers balance. Whilelabor market conditions remained stable, the increasing proportion of unemployment benefit claimants relative to the total number of insured persons warrants close monitoring.
Source : Press Release on the Economic and Monetary Conditions for June and Q2/2025
