Rapid population ageing is also reducing labour supply and domestic purchasing power, further weighing on growth prospects. GDP growth slowed to around 2.1 to 2.2% last year and is expected to drop further to about 1.5 to 1.6% this year. As a result, fiscal year 2026 and 2027 budgets may be postponed to the extent that government spending contributes almost nothing to GDP growth. However, this remains below Thailand's estimated potential growth of 2.7% and well short of the 3.5 to 5% achieved in earlier decades. Without decisive action to lift investment and productivity, the governor cautioned, economic growth is likely to remain structurally subdued.
