Thailand’s economy saw improvement in January compared to the previous month, with support from tourism and consumer spending, according to the Bank of Thailand (BoT).
Government initiatives, such as a week-long public transport fee waiver and a consumer tax campaign, boosted spending. The BoT also said that auto production was showing signs of recovering.
As Southeast Asia’s second-largest economy, Thailand reported a current account surplus of US$2.7 billion in January. Exports rose by 12.9% year-over-year, while imports increased by 7.5% in the same period.
Despite these gains, exports and industrial goods production faced challenges from ongoing structural issues. Earlier in the week, the BoT unexpectedly lowered its key interest rate by 25 basis points to 2.00%.
The decision, made during the central bank’s first meeting of the year, was aimed at addressing a weaker growth outlook and uncertainties surrounding global trade policies.
This move came after repeated calls from the government for more monetary easing to stimulate the struggling economy. The central bank now anticipates growth slightly above 2.5% this year, down from its previous forecast of 2.9%.
The rate cut follows a hold in December and a quarter-point reduction in October. The next interest rate review is scheduled for April 30.
“We need to closely monitor employment in sectors like construction and automotive,” said assistant governor Chayawadee Chai-anant during a press conference. Thailand’s economy grew by 2.5% last year, falling short of expectations and lagging behind neighbouring countries.
Finance Minister Pichai Chunhavajira projected growth between 3% and 3.5% this year, fuelled by government stimulus measures and robust foreign investment. The government plans to roll out the third phase of its 450 billion baht ($13.27 billion) stimulus program in the second quarter of 2025.
SET stocks head for bear market
Meanwhile, the Stock Exchange of Thailand (SET) Index dropped by as much as 2.4% on Friday, extending its fall from an October peak to over 20%. Shares of Delta Electronics Thailand Plc and Airports of Thailand Plc were among the key contributors to the decline.
By midday, the SET closed at 1,195.26 points, down 20.47 points or 1.68%, with trading valued at 29 billion baht.
Foreign investors have continued to pull out of Thailand’s stock market, which has been the region’s poorest performer in 2025. Over the past two years, nearly $10 billion has been withdrawn from Thai equities. Concerns are growing that missed growth targets in 2024 will worsen as US President Donald Trump moves to impose tariffs on various nations.
“The ongoing weakness in the SET reflects the fragile state of Thailand’s economy. Government policies over the last decade have failed to address structural problems,” said Pon Van Compernolle, managing partner at RVC Emerging Asia Fund. “This shows a lack of confidence in the market amidst continued selling by both foreign and local investors.”
According to Bloomberg data, global funds have sold $381 million worth of Thai shares on a net basis so far this year.
Thailand could face retaliatory tariffs from the US due to its higher import duties on American goods compared to US tariffs on Thai exports. Government agencies are exploring measures to safeguard trade interests. Prime Minister Paetongtarn Shinawatra has called for greater coordination between the central bank and the Finance Ministry to boost economic growth.
The drop in Thai stocks was part of a broader regional selloff, triggered by Trump’s latest tariff threats. Indonesia’s main stock index also fell and appeared set to end the day in a bear market, which has contributed to a more than 10% decline in the MSCI ASEAN Index since its September high.
