As Thailand approaches 2025, its economic landscape is poised for continued growth, albeit at a moderated pace due to global economic pressures and domestic challenges. Analyses from institutions like the Kasikorn Research Center highlight several factors that may influence business growth in the coming year.
Economic Outlook and Influencing Factors
Private consumption is projected to grow by 2.4% in 2025, a decline from the 4.6% observed in 2024. This slowdown is attributed to intensified competition from imports, particularly from China, which constitutes about 25% of Thailand’s imports. Such competition has led to a reduction in production utilization, with average capacity utilization dropping to 58% in the first ten months of 2024.
Additionally, Thailand’s aging society presents economic challenges. Over 34% of elderly individuals earn less than 30,000 baht annually, facing increased healthcare costs and higher risks of non-communicable diseases. Environmental regulations, both domestic and international, are becoming more stringent, exemplified by measures like the Carbon Border Adjustment Mechanism (CBAM) and the Climate Change Act, leading to higher adaptation costs for businesses.
Emerging Consumer Trends
Despite these challenges, certain consumer trends are expected to support business growth:
Smart Spending: Consumers are increasingly seeking value-for-money purchases.
Self-Healing: There is a growing focus on emotional well-being, contemporary lifestyles, and products with compelling narratives.
Sustainability: Eco-friendly trends are gaining traction, aligning with both domestic and international market demands.
Top 5 Thriving Business Sectors
Health Foods and Beverages: The market is expected to grow by 5-7%, driven by health-conscious trends and an aging population.
Healthcare and Beauty: Increased health awareness is projected to boost healthcare spending by 4-6% annually.
Tourism and Emotional Well-being Services: This includes sectors like pet-related activities, concerts, and spirituality tours. For instance, the pet food market is anticipated to grow by 10-15%, reflecting a rise in pet ownership.
Child-related Products and Services: The children’s product market is expected to grow by 4%, as parents continue to demand quality and safe products.
Green and Low-Carbon Businesses: Approximately 58% of consumers are willing to pay more for eco-friendly goods and services, indicating a robust market for sustainable products.
Top 5 Declining Business Sectors
Manufacturing of Fashion, Furniture, and Home Décor: Sales growth is slowing due to fragile purchasing power and competition from imports.
Combustion Engine Car Dealerships: The shift towards electric vehicles is exerting pressure on traditional vehicle sales.
Real Estate: The sector continues to contract due to subdued demand and a high inventory of unsold units.
Traders and Intermediaries: Manufacturers are increasingly adopting omnichannel strategies to reach consumers directly, reducing the need for intermediaries.
High-Carbon Businesses: Industries such as steel and aluminum are facing environmental pressures alongside competition from imports, challenging their sustainability.
Conclusion
Thailand’s business environment in 2025 presents a complex interplay of opportunities and challenges. Businesses that adapt to consumer trends emphasizing health, well-being, and sustainability are poised to thrive. Conversely, sectors resistant to change or slow to innovate may face decline. Strategic adaptation and responsiveness to both domestic and global economic pressures will be crucial for businesses aiming to succeed in this evolving landscape.
