Thai Economy Stumbles As Rice Exports Decline, Consumers Pull Back

BANGKOK, July 29 – Thailand’s economy is showing fresh signs of strain, as shrinking rice exports and falling consumer spending signal broader instability in Southeast Asia’s second-largest economy.

Rice exports fell by 30% in the first quarter of 2025, marking Thailand’s lowest export volume in over a decade. Vietnam has now overtaken Thailand as the world’s second-largest rice exporter, intensifying pressure on Thai agri-exporters.

At the same time, domestic consumption is weakening. Restaurant and hospitality spending fell by over 40% compared to the same period last year, according to data from the Thai Chamber of Commerce.

The slowdown has been compounded by foreign capital flight, with international investors selling off Thai equities for six consecutive months. “There is growing concern about both internal demand and external competitiveness,” said Somchai Srithanon, an economist at Kasikorn Research.

The Thai baht has also depreciated slightly, making imports more expensive and further burdening SMEs already battling supply chain costs and price-sensitive buyers.

The government has promised new stimulus measures, including tax breaks for agribusinesses and subsidies for small exporters. But critics say structural reforms are needed. “Thailand must invest in agricultural innovation and regional marketing to compete with Vietnam,” said Somchai.

As global markets shift and geopolitical risks rise, Thailand’s traditionally resilient export economy is now on the defensive.

Sources:
The Thaiger (2025) Thailand’s economy slows as consumer demand weakens. Link
Bangkok Post (2025) Rice exports decline as Vietnam climbs. Link
Reuters (2025) Capital outflows signal investor caution in Thai markets. Link