Thailand’s economy faces significant challenges in 2025, with experts projecting growth rates between 2.05% and 2.7% amid global uncertainties and the return of Donald Trump as US president.
Att Pisanwanich, adviser at Intelligent Company Research Consultant (IRC), warns that Thailand could experience its slowest growth rate in seven years. He identifies five key risk factors: high household debt, investment policy uncertainties, Trump’s fiscal policies, Chinese economic challenges, and escalating geopolitical conflicts.
Export prospects appear to be of particular concern, with Att forecasting just 1.9% growth due to proposed US tariff increases. Six major product categories face potential 10% tariffs, including electrical appliances, auto parts, and rubber products. This could result in Thailand’s highest trade deficit with China in six years, exceeding 1.6 trillion baht.
Somprawin Manprasert, chief economist at SCB EIC, has revised the global economic growth forecast for 2025 from 2.8% to 2.5%. He anticipates that Trump’s policies will intensify trade protectionism and geopolitical tensions, affecting trade, investment, and labour markets globally. SCB EIC expects one policy rate cut to 2% in February 2025, with the Thai baht projected to range between 33.50-34.50 against the US dollar by the year-end.
Piti Srisangnam, executive director of the ASEAN Foundation, outlines two potential scenarios: Trade War 3.0, or US-China benefit sharing. Under Trade War 3.0, US tariffs on Chinese imports could reach 60%, severely impacting Thai exports and domestic markets. Even in a more optimistic benefit-sharing scenario, Thailand would face increased competition and potential market displacement.
Thailand, a popular tourist destination known for its beautiful beaches, rich culture, and delicious cuisine, is facing economic headwinds in 2025 as the global economy continues to face uncertainties.
The COVID-19 pandemic has had a significant impact on Thailand’s economy, with the country’s tourism industry being hit particularly hard. Travel restrictions and lockdowns have led to a sharp decline in the number of international visitors, causing a massive drop in tourism revenue.
In addition to the challenges posed by the pandemic, Thailand is also facing other economic headwinds, including rising inflation, high levels of household debt, and a slowdown in global trade. These factors have put pressure on the country’s economic growth and raised concerns about its long-term economic prospects.
To address these challenges, the Thai government is implementing various measures to stimulate economic growth, including fiscal stimulus packages, monetary easing, and structural reforms. However, the effectiveness of these measures remains uncertain, given the ongoing global economic uncertainties.
As Thailand navigates its way through these economic headwinds, it is crucial for the government to adopt a comprehensive and coordinated approach to address the challenges facing the economy. By implementing sound economic policies and reforms, Thailand can weather the storm and emerge stronger in the post-pandemic world.
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