Pattaya feels the impact as World Bank projects just 1.8% GDP growth for Thailand in 2025. (Photo by Jetsada Homklin) PATTAYA, Thailand — As Pattaya grapples with a slow tourist season and uncertainty in its local business scene, the city is also confronting the broader economic challenges facing Thailand. According to a recent World Bank report, the Thai economy’s potential growth has been declining steadily over the past decade — a reality that now weighs heavily on regional hubs like Pattaya. Dr. Kiattipong Ariyaprachya, Senior Economist at the World Bank, shared at the launch of the Thailand Economic Monitor on July 3, 2025, that Thailand’s GDP growth is projected to be a modest 1.8% this year and 1.7% next year. These figures reflect both short-term shocks and longer-term structural issues. “The Thai economy faces multiple challenges, from trade policy uncertainties affecting exports — a key engine of growth — to deep-seated structural problems like aging demographics, technological gaps, and shrinking fiscal space,” Dr. Kiattipong explained. Thailand’s growth potential — or the maximum sustainable economic output without triggering inflation — has fallen from around 3% a decade ago to approximately 2.6-2.7% today. This slowdown presents a sobering backdrop for cities like Pattaya, whose tourism-driven economy depends on steady national and global growth. Locally, businesses and tourism operators feel this pressure. Reduced international arrivals and cautious consumer spending are reflections of the broader economic malaise, leaving Pattaya’s hopes pinned on upcoming government stimulus programs and future high-profile events. Dr. Kiattipong added that while current growth is limited, targeted investments in digital infrastructure, human capital, new trade partnerships, and deregulation of key sectors could lift Thailand’s growth potential back up to 3.4% in the years ahead. However, political uncertainty remains a looming concern. Although the World Bank’s latest analysis did not factor in political volatility, historical experience suggests such instability can delay government spending and new projects, impacting economic momentum — especially around the passing of the 2026 national budget. “The budget for 2026 is expected to pass on schedule, allowing ongoing projects to continue uninterrupted,” Dr. Kiattipong said. “But any new initiatives that have not yet begun may face delays due to political uncertainty.” For Pattaya, this means navigating a complex economic landscape: short-term tourist fluctuations amid long-term structural and political factors affecting Thailand’s overall economic health. The city’s resilience will depend not only on seasonal visitor numbers but also on how effectively national reforms and investments boost the country’s underlying growth potential.