[BANGKOK] Thailand’s economy is expected to improve in the first quarter of 2026 after a slowdown in the second half of 2025, the central bank chief said on Tuesday (Oct 28).
The Thai government is currently implementing a series of stimulus measures, as South-east Asia’s second-largest economy struggles with weak consumption, US tariffs, and a strong baht.
The economy is expected to slow in the second half of 2025, after growing 3 per cent annually in the first half, due to the front-loading of exports earlier this year, governor Vitai Ratanakorn told a business seminar.
“This year might not be a good year for the economy,” he said. “The slowdown will start in the third and fourth quarters, before improving in the first quarter next year.”
The central bank forecasts that the growth of gross domestic product, which has lagged regional peers in recent years, will reach 2.2 per cent this year and 1.6 per cent in 2026. It stood at 2.5 per cent last year.
Support measures for bad debt
Vitai also told the seminar that the country needs to tackle its bad debt, with support measures set to be finalised over the next one or two weeks.
The measures, which will address household debt under 100,000 baht (S$3,980), are expected to help about two million people, Vitai said.
Thailand’s stubbornly high levels of household debt have shackled the economy for years, with the ratio of household debt to GDP standing at 86.8 per cent at the end of June, among the highest levels in Asia. The amount of debt stood at 16.3 trillion baht.
“If we don’t urgently and seriously address household debt, I think any effort to push GDP higher will constantly face constraints,” Vitai said.
Non-performing loans not at a crisis level
At more than 3 per cent of total loans, banks’ non-performing loans are high but not at a crisis level yet, Vitai added. The government has said it will spend 10 billion baht this month to buy bad debt.
The central bank will also issue new regulations, allowing financial institutions to set up joint venture asset management companies with existing ones to help troubled smaller businesses, Vitai said.
There were about 90 asset management companies nationwide, with roughly half operating actively, he added. REUTERS
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