iceroll:Unsettled conditions persist over the next six months
Thailand's Economic Outlook: Adapting to Turbulent Times
Thailand's economy is bracing for a rocky six-month period, with the government preparing to roll out measures to minimize any negative impacts, as revealed by Deputy Prime Minister and Finance Minister, Pichai Chunhavajira. Blaming the forthcoming instability on a volatile global economic climate, Pichai pointed to the ripple effect of US President Donald Trump's tariff policy.
"The world's economies have been thrown for a loop by Trump's trade policies," Pichai admitted. "But we're hopeful that the globe will readjust and learn to coexist in this new economic landscape." Despite this cautious optimism, he warned that the short-term outlook remains precarious.
To counter the odds, Thailand plans to aggressively court foreign investments, particularly in high-tech industries that integrate Thai supply chains. This selective approach ensures that the country's economy remains innovative and resilient. Moreover, Thailand will strive to rebalance its trade relations with the US by importing more agricultural products like maize and fish, along with increasing its imports of US energy products, when prices remain competitive.
During this turbulent phase, the government will also prioritize investments to tackle structural issues such as flood and drought management. A proposed entertainment complex, which could legalize casinos, remains on the table as a potential revenue boost. Despite the challenging global situation, Pichai is optimistic that Thailand's GDP will still grow by over 3%.
However, first-quarter GDP growth is expected to surpass 2.5%, potentially even touching 3%, due to the initial resilience of global markets. As the impact of US tariff policies becomes more apparent, a global economic slowdown may manifest by the third quarter, if uncertainty persists.
In response, the government is developing contingency plans to be activated as needed. Among these plans is an expansion of the "Khun Su, Rao Chuay" household debt relief program, which will raise the eligible debt threshold from 5,000 baht to 10,000 baht in the new phase. The government will also consider using the Bank of Thailand's rate cut to stimulate investment.
Meanwhile, the Fiscal Police Office (FPO) has revised Thailand's GDP growth forecast for 2025 down to 2.1%, owing to the economic impact of US tariff policies. However, if the US opts for a 10% tariff on Thai imports instead of the announced 36%, Thailand's GDP could climb back up to 2.5%.
Under these circumstances, the government is working to expedite the disbursement of the 2025 fiscal budget to drive economic growth and consumption. For fiscal year 2025, the objective is to achieve a disbursement rate of 94.4%, with current expenditure targeted at 101% and capital investment at 74.8%.
In conclusion, as Thailand steers through uncertain waters, it's crucial for the government to prioritize its investments carefully, focus on stimulating domestic consumption, and remain nimble in adjusting economic policies as the situation unfolds.
"The government is focusing on attracting foreign investments, particularly in high-tech industries, to maintain the resilience of Thailand's economy, which is part of its business strategy."
"In an effort to counter the economic turbulence and minimize negative impacts, the government is developing contingency plans that include expanding the 'Khun Su, Rao Chuay' household debt relief program and using the Bank of Thailand's rate cut to stimulate investment, demonstrating their awareness and adaptability in the finance industry."
