In addition to the short-term economic strategies of the Bhumjaithai Party, economists advise that the new government must prioritize resolving tariff-related challenges with the United States, which pose a continued threat to the economy this year and into 2026. Other economic vulnerabilities also remain, they warn.
Poonyawat Sreesing, senior economist at Siam Commercial Bank’s Economic Intelligence Center (SCB EIC), emphasized that addressing unresolved US-Thailand tariff disputes, including the possible relocation of companies, should be a top priority.
“While the Khon La Khrueng co-payment scheme will likely boost spending in the short term, the narrow window of about 3-4 months for the new government limits the overall impact on the economy,” Poonyawat told the Bangkok Post.
SCB EIC maintains its GDP growth forecasts at 1.8% for this year and 1.5% for 2026, noting that exports are expected to be affected throughout the year by high US tariffs and ongoing trade tensions.
Although the Supreme Court has ruled against the reciprocal tariffs imposed by former US President Donald Trump, analysts warn that Trump still has the authority to implement additional tariffs, potentially sector-specific. The court’s ruling may not be issued until early next summer, and even if the tariffs are deemed illegal, Trump could still utilize other executive powers to impose new measures, analysts say.
Chananthorn Pichayapanupat of KGI Securities observed that consumer purchasing power is likely to remain subdued over the next quarter, with various indicators pointing to continued economic weakness.
Growth in GDP and consumption is expected to slow to around 1% year-on-year in the second half of the year, compared to 2.3% in the first six months. The tourism sector also remains under pressure, with international arrivals decreasing by 7.2% from January to August, totaling 21.9 million visitors.
Additionally, government spending as of August stood at 48.1% of the budget, below the historical average of approximately 55%, just ahead of the fiscal year-end in September.
KGI Securities projects GDP growth of around 1.9% for 2025, with consumption increasing only 1.7%. This suggests growth may slow further to about 1% in the latter half of the year.
Maybank Securities pointed out that the approaching March 2026 election introduces a wide range of possible economic outcomes—from policy gridlock due to inconclusive results, which would hinder GDP growth, to a decisive mandate leading to productivity and reform-oriented policies.
The firm also anticipates a 25 basis-point rate cut by the Bank of Thailand on October 8, lowering the policy rate to 1.25%, marking the first decision under the new governor Vitai Ratanakorn.