Burin Adulwattana, managing director at K-Research, said the proposed economic ministers, particularly those from the private sector with strong expertise, credibility and trust, are likely to enhance confidence among both local and international investors, reports the Bangkok Post.
"In particular, the potential revival of the Khon La Khrueng co-payment programme should support private consumption, strengthen spending confidence, and help drive the Thai economy in the second half of the year," Mr Burin said.
K-Research awaits further details and clarity on the co-payment scheme to assess its full economic impact, especially the proportion of cost-sharing between the government and consumers given the scheme’s B25 billion budget limit.
As a result, the research unit upgraded its Thai GDP growth forecast for 2025 from 1.5% to 1.8%, benefiting from front-loaded shipments to the US ahead of tariff measures under Section 232 and transshipment tariffs.
Meanwhile, the slowdown in Thai exports during the second half of 2025 could be mitigated, reducing the risk of a technical recession, according to K-Research.
The economy still faces challenges from the direct and indirect effects of US tariffs, slower tourism, and domestic political factors that require monitoring, he said.
The centre also upgraded Thailand’s export growth forecast from 3.4% to 5.7%, while easing the public investment growth forecast from 4% to 3.5%, mainly due to a delayed 2026 budget disbursement amid the political deadlock.
Mr Burin said the baht’s appreciation against the US dollar could pressure export revenues in the second half of the year. The currency is expected to strengthen due to easing US Federal Reserve policy and domestic political factors.
The Fed is expected to cut its policy rate three times in 2025 and twice next year. Recent interventions by the US president regarding the Fed’s independence have further fuelled market expectations for faster and steeper rate cuts starting this month.
K-Research expects the Bank of Thailand to reduce its policy rate once more, from 1.5% to 1.25% by the end of this year. The central bank is projected to continue easing rates, supported by short-term economic stimulus measures from the new government, said Mr Burin.
Thanyalak Vacharachaisurapol, deputy managing director at K-Research, said if the baht breaks the current level of 31.5 per dollar, it could strengthen by around 0.20 baht against the greenback. In the short term, the stronger baht is primarily driven by a weaker dollar, in line with the Fed’s monetary policy direction.
Ms Thanyalak said a clearer domestic political environment, particularly confidence in the new government’s economic team, would support baht appreciation against the dollar. However, the full effect depends on the team’s economic policies, she said.
ECONOMIC PESSIMISM HIGH
Within Asia-Pacific, Thailand stands out for a high level of economic pessimism and financial strain, with 71% of survey respondents suggesting the economy is struggling, Bangkok Post noted in another report.
Looking ahead, 56% of Thai respondents expect conditions to worsen over the next six to 12 months, marking the most pessimistic outlook among the markets surveyed.
Gen Z in Asia-Pacific reports the greatest sense of financial strain and the most negative economic outlook, yet it also leads in terms of financial optimism for the future, according to the APAC Consumer Navigator survey conducted in the second quarter of 2025.
The survey was carried out by Dentsu using Toluna’s online research panel between May 7-17 across Australia, China, Indonesia and Thailand. Each country had a sample size of 700 respondents aged over 18.
Economic sentiment in Asia-Pacific has deteriorated, especially in Thailand, Australia and Indonesia, while optimism in China has eased, the survey found.
More people in the region across all age groups now feel the economy is declining or in a recession, with negative views rising by 15% among both Gen Z and older cohorts. Gen Z stands out, with 45% believing the economy is currently in recession.
Some 46% of Baby Boomers and Gen Z share the most pessimistic economic outlook over the next 12 months.
However, Millennials continue to remain optimistic about the economic forecast, mirroring a trend in the US.
Thais report the highest percentage of consumers who believe the economy is already in recession (55%), surpassing Australia (36%), Indonesia (34%) and China (13%). The increase in pessimism over the first quarter was also highest in Thailand, Indonesia and Australia.
In addition, Thais have the most pessimistic outlook for the economy over the next six to 12 months, with 56% expecting it to worsen, exceeding Australia (46%), Indonesia (39%) and China (19%).
Thailand was the most financially strained market among the four surveyed, with only 40% of Thai respondents able to afford all their monthly expenses in the past 30 days, the lowest among the surveyed countries (China 75%, Australia and Indonesia both 51%).
Thai consumers, especially Gen Z, report growing discomfort in managing expenses. A robust 60% of Thai consumers reported some difficulty managing expenses (49% could afford only some expenses, 11% struggled to afford any), the highest level among the surveyed nations.
While more than half of Asia-Pacific consumers feel financially secure, this confidence is unevenly distributed ‒ Thailand was the most financially strained market, and Gen Z reported the greatest personal finance challenges across the region.
Some 59% of Thai consumers feel their personal finances are "not in very good shape" or "terrible", which is the highest combined percentage among the countries, indicating a broad lack of personal financial security.
Looking at the next 30 days, 15% of Thais expect their personal finances to worsen, the highest percentage among the surveyed countries, with Australia at 7%, Indonesia at 4% and China 3%.
Consumers are seeking bargains for groceries and household necessities due to financial discomfort, as well as keeping a budget for out-of-home food purchases. Spending on exercise and wellness remains steady, highlighting the priority placed on health despite economic challenges.
Millennials remain optimistic about the future, while Gen Z balances financial stress with hope for improvement.
Marketers should emphasise value and savings without compromising quality to retain brand loyalty, as consumers seek deals on essentials while still investing in wellness, according to the survey. The focus should be on tiered offerings, loyalty perks and strategic discounts, noted Dentsu.
Marketing should also use storytelling to build trust and showcase product reliability, addressing economic anxiety with empathetic messaging, transparent pricing, and modest adjustments that show genuine support, according to the survey findings.