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HOPING FOR THE BEST

June 30, 2025

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Bangkok Post

The second half could be a test for the retail and restaurant sectors as consumers tighten their belts, writes Kuakul Mornkum

Thailand's retail and restaurant sectors are bracing for a difficult second half of the year as weak consumer spending, trade uncertainties and political instability are expected to pressure growth.

Industry associations are urging the government to take immediate action and use its budget more effectively.

RETAIL CHALLENGES

The outlook for the Thai economy in the second half of the year appears sluggish due to declining consumer purchasing power, Somchai Pornrattanacharoen, honorary advisor to the Thai Wholesale and Retail Trade Association, said.

"Low-income consumers are earning less because of falling agricultural prices, such as rice, rubber and palm oil, which directly reduces their spending power," he said.

Meanwhile, high-income consumers are tightening their belts due to diminishing wealth, especially those with investments in the stock market, Mr Somchai said.

Tourism, which is vital to the Thai economy, is stagnant as foreign arrivals remain flat, while Chinese visitor numbers have plunged this year.

Given these factors, he said he anticipates the next six months will bring significant economic challenges.

While large retail chains may remain resilient, small and medium-sized retailers are already feeling the effects of the economic slowdown, Mr Somchai said.

Thailand's export sector will also influence the direction of the economy in the second half of 2025, he said.

Exports remain stable as the US has paused its tariff hikes for 90 days, but the outcome of trade negotiations between Thailand and the US remains uncertain.

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