Thailand's gross domestic product (GDP) grew by a better-than-expected 3.1% on year in the first quarter, but government officials also tempered their forecast for economic growth in 2025, citing trade concerns.

Thailand's GDP will expand by an estimated 1.8% on year in 2025, a downward revision from the 2.8% growth forecast made in mid-February, said the Office of the National Economic and Social Development Council (NESDC).

In the first quarter, Thailand's export of goods and public investment expanded favorably, undergirding GDP. Private consumption and government consumption expenditure decelerated, but remained in the positive column though slowing, reported the NESDC

However, private investment continued to contract in the first quarter, raising concerns regarding business confidence in Thailand.

"Private investment declined by 0.9% (on year), following a 2.1% contraction in the previous quarter. Investment in machinery and equipment decreased by 0.3%, compared

to a 1.7% decline in the prior quarter. Meanwhile, construction investment contracted by 3.8%, continuing from a 3.9% decline in the previous quarter," reported the NESDC.

Ahead of the April tariffs imposed by the US starting in April, Thailand's export picture was strong in the first quarter, reported the NESDC.

Export "value amounted to $80.4 billion, exhibiting

robust growth of 15.0%, the highest rate in 13 quarters, and accelerating from 10.6% in the previous quarter," said the NESDC. "The export volume expanded by 14.0%, rising from 9.3% in the preceding quarter, primarily driven by the strong performance of manufactured goods exports."

In contrast, the rebound of Thailand vast tourism sector from the COVID-19 era appears to be leveling off, without having reached pre-COVID-19 travel levels.

"The accommodation and food service sector expanded by 7.2% (on year), slowing from a 10.4% gain in the previous quarter, due to a deceleration in both international

tourist arrivals and receipts," reported NESDC. "In this quarter, the number of international tourist arrivals was

9.549 million people (equivalent to 93.76% of the pre-pandemic level), increasing by 1.9%."

Despite economic challenges, unemployment and inflation remained low in Thailand in the first quarter.

"On economic stability, the unemployment rate stood at 0.89% (in the first quarter), slightly higher than 0.88% in the previous quarter but lower than 1.01% in the same quarter of the previous year. The headline and core inflation averaged at 1.1% and 0.9%, respectively," said the NESDC.