MPI grows against the trend! Is the Thai economy really recovering…or is it just an illusion?

The Industrial Production Index (MPI) in May 2025 was 100.79, an increase of 1.88% compared to the same period of the previous year, expanding for the second consecutive month, with the capacity utilization rate (Cap U) increasing to 61.14% from 56.62% in April, reflecting the recovery of the manufacturing sector.

The Manufacturing Production Index (MPI) is an index that measures the level of production in the industrial sector in the country. When the index increases, it indicates that the manufacturing sector is expanding, which indicates that the economic situation in the industrial sector is improving.

The key driving industries include :

  • Automotive grew by 12.86% due to orders generated during auto shows and continued demand for hybrid, plug-in and electric vehicles.
  • Exports continued to grow for the 11th consecutive month, with a total value increasing by 18.4% from the acceleration of exports to major markets before the new tax measures. The value of industrial product exports (excluding military products and gold) was 23,552 million dollars, up 22.3%.

However, despite the good numbers at the moment, there are still many factors to watch out for in the second half of the year:

  • Uncertainty over tax measures from major trading partners
  • The baht is strong.
  • Imported goods flood in
  • Household debt is as high as 16.4 trillion baht, or more than 88.4% of GDP.
  • Tourism sector slows due to safety concerns and rising costs

All these effects began to be reflected in the decline in the industrial confidence index in May, leading to a “continued watch” signal for the overall industrial economy.

Thailand’s GDP this year has been revised down from 1.5-2.0% to only 0.5-1.5%.

Industries that grew well in May included:

  • Automotive: +12.86% led by large hybrids, pickups and electric vehicles.
  • Palm Oil: +25.14% from increased orders from India, China and Myanmar.
  • Sugar: +21.43% from increased sugarcane volume and attractive prices for farmers.

Industries that are still shrinking:

  • Air conditioners: -10.64% due to inclement weather and price competition from abroad.
  • Non-alcoholic beverages: -13.56% due to discontinuation of major producers
  • Coffee, tea, herbs: -80.83% from the 5th consecutive month of production cessation.

Data source: Bangkok Business Online

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