BANGKOK, 9 October 2025: Thailand’s economy in 2025 tells a complicated story. Gold exports have soared nearly 70% in the first seven months of the year, helping push the baht to its strongest level in five years.
At the same time, tourists, who bring billions in invisible export earnings, are finding the country less affordable. This is the gold–baht conundrum: success in gold and finance weakens competitiveness in tourism.
Gold inflows lift the baht
Global investors are rushing to safe-haven assets, and Thai traders are riding the wave. In the first seven months of 2025, gold exports exceeded THB254 billion (approximately USD8 billion). As dollars flowed in, the baht strengthened by over 8% against the US dollar, dropping from around THB34 per dollar to as low as 31.70.
Other currencies tell the same story. Against the pound, one sterling (UKP1) now buys about THB43 to 44, making a British couple’s holiday in Phuket more expensive than a year earlier. The euro and yuan have also slipped, and Indian travellers in particular feel the squeeze.
It is worth noting, however, that Thailand is not a significant gold mining country. Most of the bullion comes from abroad, often imported from Switzerland, Hong Kong, or Singapore, before being refined and re-exported through Bangkok’s huge jewellery and bullion markets. Thailand is essentially a global hub, not a gold producer.
Why gold alone doesn’t drive the baht – but gold is the spark
Economists stress that correlation does not mean simple cause and effect. In 2025, gold exports jumped nearly 70%, while the baht appreciated by more than 8% against the US dollar. One study reported a correlation of 0.88 — with a value of 1.0 indicating perfect correlation. In plain terms, when gold moves up, the baht almost always follows. Yet, because the link is not one-to-one, other forces are clearly at work, including returning tourists and speculative investors, as well as China’s slowdown and global trade tensions. Gold is the spark, but not the whole fire.
A strong baht brings mixed results
For gold traders and financial markets, this is a triumph. For tourists and the businesses that depend on them, it feels like a squeeze. A London family booking two weeks in Phuket suddenly finds meals and hotels pricier, not because local rates have changed, but because the pound now buys fewer baht.
The result is Thailand’s loss, as holidaymakers look to cheaper alternatives in Vietnam, Cambodia, or Indonesia.
Economists call it Dutch Disease
There is a well-known name for this kind of imbalance. Economists call it Dutch Disease, a term coined in 1977 when the Netherlands discovered natural gas in the North Sea. The gas boom sent the Dutch guilder soaring, but Dutch manufacturers became less competitive abroad.
Thailand’s conundrum looks strikingly similar. The gold boom lifts the baht, but the stronger currency makes tourism less affordable and factory exports less competitive. Car production has already slipped this year, a sign of how quickly rising currencies can hurt other industries. The rise of imported EVs is also a factor.
Tourism is an export?
Tourism is often referred to as an invisible export because no container ships leave port, yet billions of dollars flow in. In Thailand, it accounts for a significant share of GDP (20%) and supports millions of livelihoods.
The challenge is that tourism is highly price sensitive. Families on tight budgets notice quickly when the baht strengthens. Indian travellers may choose Kuala Lumpur over Bangkok. Even if total arrivals rise, spending per head can fall. For tuk-tuk drivers, street food vendors, and family-run hotels, the difference is immediate.
Who gains, who loses
The winners are easy to see. Gold traders and refineries are enjoying record business. Financial markets applaud a baht that signals strength and stability. The government welcomes healthier reserves and revenues.
The losers are just as visible. Tourists feel squeezed, local businesses see thinner margins, and communities already struggling with crowded beaches or waste disposal find the rewards smaller when visitor spending power shrinks.
Avoiding the conundrum
The solution is not to restrict gold flows or artificially weaken the baht. Instead, Thailand must adapt by making its tourism less vulnerable to price shifts.
This means targeting travellers who are less price sensitive and more experience-driven. Wellness and medical tourism, gastronomy, cultural immersion, and high-end journeys, such as the new Blue Jasmine luxury train to Chiang Mai, are all ways to broaden appeal.
Thailand can also improve its infrastructure, manage visas effectively, and invest in sustainability to enhance its value. If these steps are taken, the country can soften the conundrum and prove that gold and beaches do not have to be in conflict.
Conclusion
The gold–baht conundrum illustrates how prosperity comes with hidden costs. Gold exports and safe-haven flows have lifted the baht, but more substantial currency risks could undercut tourism and manufacturing.
Other factors, including speculative inflows and the Chinese slowdown, as well as concerns about tariffs and global instability, also play a role. Handled poorly, the winners in trade will be outweighed by the losers in tourism. Handled wisely, Thailand can balance its visible and invisible exports, turning this conundrum into an opportunity for growth.
About the Author
Andrew J. Wood is a former hotel general manager with over 35 years of experience in the hospitality and tourism industries. Born in Yorkshire, England, he has lived in Thailand since 1991. A long-time resident of Bangkok, Andrew is the Past President of Skal International Asia, Skal International Thailand, and has twice served as President of Skal Bangkok. He is a regular guest lecturer at universities and a writer contributing to regional publications.
