Economy

Thai Baht’s Surge: How Currency Strength Threatens Thailand’s Exports and Tourism

Baht’s rise hurts Thai exports & tourism; firms face thinner profits amid economic slowdown.

byAndres Castro

October 1, 2025, 10:38 AM

Stack of Thai Baht banknotes with a portrait of a king

A stack of Thai Baht banknotes, featuring a portrait of a king, is shown. By MDL.

Executive Summary

The Thai baht’s appreciation of over 8% against the U.S. dollar this year is significantly eroding export margins and making Thai goods more expensive internationally.

Thailand’s crucial tourism sector is being negatively impacted by the stronger baht, as it makes holidays more expensive and may deter international visitors.

These currency challenges are exacerbating an economic slowdown already affected by political instability and new U.S. tariffs, creating a complex outlook for the nation’s economic recovery.

The Story So Far

Thailand’s economy is currently facing significant headwinds due to the substantial appreciation of the baht against the U.S. dollar, which is eroding export margins and deterring tourists. This currency strength is compounded by new 19 percent U.S. tariffs impacting its export-oriented economy, and follows two years of political instability that have already contributed to economic deceleration.

Why This Matters

The significant appreciation of the Thai baht is actively eroding export margins, making Thai goods more expensive internationally and reducing profitability for businesses, while simultaneously deterring tourists by increasing the cost of holidays in Thailand. These combined pressures are exacerbating an existing economic slowdown, further complicating the nation’s recovery and growth prospects amidst political instability and new U.S. tariffs.

Who Thinks What?

Thai exporters view the strong baht as eroding profit margins on international contracts and creating uncertainty in business planning, especially compounded by new U.S. tariffs.

The tourism sector sees the strong baht as making holidays more expensive for international visitors, raising concerns that tourists may opt for more budget-friendly destinations.

Thai businesses across various sectors are grappling with the significant appreciation of the baht, which has gained over 8 percent against the U.S. dollar this year. This currency strength is eroding export margins and deterring tourists, exacerbating an economic slowdown already impacted by political instability and new U.S. tariffs.

Economic Pressures

The baht’s rise from 34 to the dollar on January 1 to a high of 31.70 on September 9, before settling around 32.40, has made Thai goods more expensive internationally. This comes as Washington’s 19 percent tariffs further strain the country’s export-oriented economy.

Exporters of Thai farm produce, such as American Peyton Enloe, report reduced profitability on contracts and increased uncertainty in business planning. Companies across the board are experiencing thinner profit margins due to the unfavorable exchange rate.

The tourism sector, a vital component of Thailand’s economy, is also feeling the pinch as the stronger baht makes holidays more expensive. This raises concerns that international visitors may opt for more budget-friendly destinations elsewhere in Asia.

This currency challenge compounds a period of economic deceleration following two years of political instability. The combined factors present a complex outlook for the nation’s economic recovery and growth prospects.

The sustained strength of the Thai baht presents a multifaceted economic challenge for Thailand. Both its crucial export and tourism industries are facing significant headwinds, underscoring the delicate balance required for sustained economic stability amidst global and domestic pressures.