Declining Confidence Persists
Sixth Consecutive Drop in July
On August 7, 2025, a survey by the University of the Thai Chamber of Commerce revealed that Thai consumer confidence fell for the sixth straight month in July, reaching its lowest point in 31 months at 51.7, down from 52.7 in June. The decline reflects growing concerns over US tariffs, a sluggish economy, and political instability. These factors have dampened purchasing power, with consumers feeling the pinch of high living costs and uncertain trade policies, signaling a challenging economic outlook.
US Tariffs Fuel Uncertainty
Transshipment Rules Need Clarity
The survey highlighted fears surrounding US tariffs, despite a reduction from 36% to 19% on Thai goods. University president Thanavath Phonvichai noted that uncertainties about tariffs on transshipments through Thailand from third countries, particularly China, continue to unsettle businesses. Clear definitions of these rules are essential for companies to adapt, as the ongoing trade war exacerbates economic pressures. This lack of clarity undermines confidence, hindering Thailand’s ability to navigate global trade challenges effectively.
Economic Growth Forecast Slashed
Stagnation Prompts Stimulus Calls
Thanavath warned that Thailand’s economy is stagnating, projecting a mere 1.7% growth for 2025, a sharp drop from 2.5% in 2024. High living costs and subdued consumer spending are stifling recovery, prompting calls for government intervention. “The economy needs more stimulation,” he urged during a press conference, emphasizing the urgency of policies to boost purchasing power. Without significant measures, Thailand risks prolonged economic slowdown, further eroding consumer optimism and market stability.
Political Instability Adds Pressure
Prime Minister’s Suspension Sparks Concerns
The suspension of Prime Minister Paetongtarn Shinawatra, pending a court ruling over her handling of a call with former Cambodian leader Hun Sen, has deepened political uncertainty. Thanavath noted that this instability clouds the economic outlook, further undermining consumer confidence. As Thailand grapples with internal governance challenges and external trade pressures, the combination of political and economic woes creates a daunting environment for businesses and households, necessitating swift action to restore trust and drive recovery.
