The Bank of Thailand anticipates that the “Khon La Khrueng Plus” co-payment scheme will significantly contribute to GDP growth in the final quarter of this year.
The central bank forecasts the Thai economy to grow by 0.5% quarter-on-quarter in the last three months of 2025, rebounding from a 0.5% decline in the previous quarter. This recovery is expected to be largely driven by the government’s economic stimulus measures, especially the co-payment program, according to Piti Disyatat, Deputy Governor for Monetary Stability, speaking at Wednesday’s Monetary Policy Forum.
“The stimulus scheme is projected to add approximately 0.2-0.3 percentage points to GDP growth during the final quarter,” he stated.
These measures are also expected to sustain the economy’s momentum, pushing year-on-year GDP growth to 1.3% in the fourth quarter, slightly lower than the 1.5% recorded in the third quarter. The central bank credits the boost primarily to the co-payment initiative and incentives aimed at promoting domestic tourism, which are forecast to increase private consumption.
GDP growth in the fourth quarter is also anticipated to be supported by export expansion, driven by front-loaded activities and the reopening of previously closed factories. The temporary shutdowns of industries such as petroleum, automotive, and alcoholic beverages in the third quarter, intended to improve efficiency, contributed to the 0.5% contraction in GDP during that period.
Amid domestic and external challenges, the Bank of Thailand has revised its growth forecasts for 2025 and 2026 downward to 2.2% and 1.6%, respectively, from earlier estimates of 2.3% and 1.7%.
The central bank also projects a slight weakening of the Thai baht against the US dollar in the second half of 2025, following its appreciation earlier in the year. After reaching a 7.8% peak of appreciation in the first half, the baht has depreciated by 4.4% against the dollar for the year to date.
Despite the stronger baht, which has affected Thailand’s export competitiveness and tourism, the central bank expects an improvement in foreign tourist arrivals in the final quarter, with an annual total of 33 million visitors for 2025, rising to 35.5 million in 2026.
Tourist arrivals from China, which fell sharply by 55% year-on-year in April, are showing signs of recovery. The decline is expected to narrow to 28.9% in this month. The central bank forecasts Chinese travelers will number around 4.4 million in 2025 and increase to 6.6 million in 2026.