PATTAYA, Thailand – Warnings about Thailand’s economic slowdown are growing louder, with the latest assessment from SCB EIC projecting growth of just 1.5% for 2025. The combination of a strong baht, ongoing trade tensions, and rising public debt is poised to put pressure on businesses, households, and the tourism-dependent economy of Pattaya.
According to Yanyong Thaijaroen, Chief Executive Officer of Economic and Sustainability Research at SCB EIC, Thailand faces a perfect storm of external and internal pressures. Global trade volatility, complicated tariff barriers, and slowing world demand threaten exports, while the rapid appreciation of the baht – the strongest in four years – is eroding competitiveness. Local businesses, particularly those in tourism, agriculture, and service industries reliant on foreign income, may struggle to convert dollar revenue into baht for operating costs, potentially squeezing profits further.
For Pattaya, a city heavily reliant on international visitors, the implications are stark. The strong baht makes Thailand more expensive for key markets like China, India, and the U.S., even as Pattaya attempts to recover from post-pandemic tourist fluctuations. While some tourists already have trips booked, the high exchange rate could deter additional arrivals or reduce spending once they are here, affecting hotels, bars, restaurants, and activity operators.
The city’s long-term growth will also be tested by domestic challenges. SCB warns that Thai households and SMEs remain fragile, income growth is weak, and debt levels continue to rise. Pattaya’s smaller businesses, already operating on thin margins, could face an uphill battle if consumer demand slows. Uncertainty over political stability and budget implementation in 2025 could further delay government stimulus, leaving private businesses to navigate rough waters largely on their own.
Labor market concerns add another layer of uncertainty. Rising unemployment, particularly among new graduates, and shrinking hours across sectors threaten Pattaya’s service economy, which depends on an available workforce to handle peak tourist seasons. Meanwhile, disparities between large corporations and smaller SMEs indicate a widening K-shaped recovery that could marginalize many local operators.
The central bank’s potential rate cuts – likely one more this year and another early next year – may provide some relief by lowering borrowing costs, but they will do little to increase new lending or immediately revive spending. Pattaya businesses that have grown reliant on foreign tourist revenue and domestic consumption may still find themselves squeezed between higher costs, a stronger baht, and cautious consumers.
SCB EIC’s analysis frames three urgent tasks for the government: stabilize confidence, stimulate domestic demand, and pursue structural reforms. For Pattaya, these macro-level strategies must translate into concrete support for tourism, SME resilience, and labor market stability. Without coordinated efforts, next year could be a severe stress test for the city, which has long been a bellwether for Thailand’s broader economic health.
