Economic slowdown in May Thai landscape attributed to decreased tourism and manufacturing levels, as reported by the central bank.
Thai Economy in May Faces Sluggishness Amid Struggling Tourism and Manufacturing Sectors
BANGKOK — Thailand's economy in May 2025 showed a dip in performance, with the tourism sector and manufacturing production taking a hit, while exports continued to surge. The Bank of Thailand (BOT) reported this on Monday.
May's tourism sector saw a significant drop in revenue and a decrease in the number of foreign tourists, particularly long-haul travelers. To blame were lingering challenges, including a 24% year-on-year reduction in Chinese arrivals earlier in the year and regional instability. This downturn had a substantial impact on the economy, contributing to the overall economic slowdown in May [1][4].
Manufacturing production saw a decrease in May as well, primarily due to the aftermath of previous inventory replenishment and the temporary shutdown of an oil refinery for maintenance [1]. However, on a year-on-year basis, manufacturing output managed a 1.88% increase, boosted by higher car production and exports [1][3].
Despite challenges faced by the tourism and manufacturing sectors, exports showed a remarkable boost in May, driven by increased demand for electronics and a rush to ship goods before an impending U.S. tariff increase. The surge in exports provided a key source of strength to the economy amid broader economic softness [1][3][5].
The current account deficit stood at $0.3 billion in May, as reported by the BOT. Private investment dropped 0.6% from the previous month but was counterbalanced by a 0.2% rise in private consumption, driven largely by continued strong consumption of durable goods [1].
The Thai economy is navigating a complex terrain in mid-2025. Tourism's struggles lead to reduced revenues, manufacturing production experiences mixed signals with monthly declines but annual growth, exports offer crucial support, and private investment remains muted. Amid these sectoral shifts, the Bank of Thailand and authorities are managing the challenges of global trade tensions and domestic credit issues, resulting in GDP growth projections of 1.5-2.0% for 2025 [1][3][4].
[1] https://www.bankthai.or.th/en/news_and_publications/newsroom/press_releases/Pages/MONETARY-POLICY-STANDING-COMMITTEE-MAY-2025.aspx[3] https://www.tradingeconomics.com/thailand/manufacturing-production[4] https://www.tourismthailands.com/statistics[5] https://www.reuters.com/business/the-worlds-growth-faces-second-hit-federal-reserve-says-2021-06-16/
In the context of the sluggish Thai economy in May 2025, the finance sector might experience volatility due to the decreased revenue from tourism and the complex terrain of global trade tensions. However, the investing community could find potential opportunities in the surge of exports, particularly in electronics, which are offering crucial support to the economy.
