Economic Growth Outlook - The Thai Fiscal Policy Office (FPO) has revised the GDP growth forecast for 2025 from 2.4% to 2.2%, while maintaining the 2026 growth forecast at 2% [1] - The downward adjustment for 2025 is attributed to a lower-than-expected economic growth rate of 1.2% in the third quarter, significantly impacted by refinery shutdowns in October and November [1] - A rebound in economic growth is observed in the fourth quarter, with an increase of 1.8%, driven by consumer stimulus measures [1] Tourism and Private Investment - By 2026, GDP growth is expected to benefit primarily from the tourism sector, with foreign tourist arrivals projected to reach 35.5 million, a 7% increase from 32.9 million in the previous year [1] - Private investment is anticipated to grow by 3.2% this year, up from 2.9% in the same period last year, supported by projects approved by the investment committee [1] Inflation and Currency Exchange Rate - The overall inflation rate for 2025 is expected to decrease by 0.1%, followed by a rise of 0.3% in the subsequent year, remaining below the central bank's target range of 1%-3% [1] - The average exchange rate for 2026 is projected at 35.5 Thai Baht per US dollar, while the average for 2025 is estimated at 32.9 Thai Baht per US dollar [2]

Group 1 - The core viewpoint of the report indicates that the Thai baht is expected to weaken by the end of 2026, with the USD/THB trading around 32.00 [1] - BMI forecasts a reduction in the positive correlation between gold prices and the Thai baht due to increased government regulation, which will suppress capital flows related to gold [1] - Starting from March 1, the Bank of Thailand will impose a daily limit of 50 million THB on gold transactions, requiring prior approval for amounts exceeding this limit [1] Group 2 - BMI anticipates that the Bank of Thailand will prioritize economic growth and may further cut interest rates by 50 basis points in 2026, bringing the policy rate down to 0.75% [1]

Economic Growth Outlook - The Bank of Thailand expects the "Khon La Khrueng Plus" co-payment scheme to boost GDP growth in Q4 of this year, projecting a quarter-on-quarter increase of 0.5% after a contraction in the previous quarter [1] - The central bank anticipates a year-on-year GDP growth rate of 1.3% in Q4, down from 1.5% in Q3, primarily supported by government stimulus measures aimed at encouraging shared healthcare costs and boosting domestic tourism [1] Sector Performance - The economic recovery is expected to be bolstered by an expansion in exports, driven by companies ramping up production and previously closed factories resuming operations [1] - Temporary production halts in various sectors, including oil, automotive, and alcoholic beverages, contributed to a 0.5% quarter-on-quarter decline in GDP in Q3 [1] Currency and Tourism - The Bank of Thailand has revised down its GDP growth forecasts for 2025 and 2026 to 2.2% and 1.6%, respectively, due to domestic and international economic challenges [2] - Despite a strong Thai baht, which appreciated by 7.8% earlier this year, its recent depreciation of 4.4% against the US dollar has negatively impacted Thailand's export and tourism competitiveness [2] - The central bank projects an increase in foreign tourist arrivals in Q4, estimating a total of 33 million foreign visitors for the year, with expectations to rise to 35.5 million by 2026 [2] Chinese Tourist Recovery - Following a significant decline of 55% in April, the number of Chinese tourists is showing signs of recovery, with a projected reduction in decline to 28.9% this month [3] - The central bank forecasts that the number of Chinese tourists will reach 4.4 million by 2025 and increase to 6.6 million by 2026 [3]

Core Viewpoint - The Thai business community believes that trade negotiations are unlikely to conclude quickly, indicating ongoing challenges in international trade relations [1] Group 1: Trade Outlook - Exports are expected to decline by over 10% year-on-year in the second half of the year, reflecting a significant downturn in trade performance [1] Group 2: Monetary Policy - There is a call for the Bank of Thailand to lower the benchmark interest rate to manage the exchange rate of the Thai baht, suggesting concerns over currency stability [1]

Core Viewpoint - The Bank of Thailand will closely monitor the exchange rate of the Thai baht, with core inflation expected to remain stable [1] Group 1 - The central bank's focus on the baht's exchange rate indicates a proactive approach to managing currency fluctuations [1] - Stability in core inflation suggests a controlled economic environment, which may influence monetary policy decisions [1]