Thailand’s Economic Slowdown Amid Tourism and Manufacturing Slump

Thailand's economy faces headwinds as declining tourism revenue and manufacturing output overshadow a robust export surge. The Bank of Thailand (BOT) reported fewer international visitors, particularly long-haul travelers, while factory production dipped due to inventory adjustments and refinery maintenance.

Exports emerged as a lone bright spot, fueled by global demand for electronics and pre-tariff shipment rushes. The BOT maintained its key interest rate, preserving policy flexibility amid global trade uncertainties and domestic political instability. First-half growth exceeded expectations, partly attributed to export order backlogs ahead of US tariff deadlines.

Monetary authorities stand ready to implement further rate cuts if economic conditions deteriorate. The current account recorded a $0.3 billion deficit in May, with private investment declining 0.6% despite a 0.2% uptick in consumption driven by durable goods purchases.