Unsteady next six months predicted ahead
Rewritten Article:
Thailand braces for six months of economic turbulence, with Deputy Prime Minister Pichai Chunhavajira announcing proactive measures to counteract any negative impacts. As Finance Minister, Pichai pointed the finger at a volatile global economic landscape, primarily caused by US President Donald Trump's tariff policy that's been shaking up economies worldwide.
"The world's taking a tumble," Pichai remarked, "but we're hopeful it'll find its footing under new conditions." However, he warned of a temporary economic downturn that needs further assessment.
To turn the tide, Thailand intends to rebalance its trading relationship with the US by importing more American goods, particularly agricultural products and energy resources. The government also plans to boost foreign investments, particularly in high-tech sectors, while remaining selective about which ventures to back.
In the domestic sector, the government will focus on fixing structural issues like flood and drought management. The controversial entertainment complex bill, which could legally include casinos, is still on the table as a potential revenue booster.
Despite the gloomy outlook, Pichai believes Thailand's GDP could grow by over 3% this year, but only if there are no major disruptions. The initial first-quarter GDP growth is expected to exceed 2.5%, possibly nearing 3%, but the US tariff policy could cause global markets to falter, leading to a global economic slowdown by the third quarter.
In response, Thailand needs contingency plans suitable for immediate implementation if needed. Among these is an expanded version of the "Khun Su, Rao Chuay" household debt relief program, which aims to forgive outstanding debt for those who pay off 10% of their debt. The eligible debt threshold will be raised from 5,000 baht to 10,000 baht.
At the Bank of Thailand, the policy interest rate has been reduced by 0.25% to support investment. However, the Fiscal Police Office (FPO) has revised the country's GDP growth forecast for 2025 down to 2.1%, citing the economic impact of Trump's tariff policies. If the US were to impose only a 10% tariff on Thai imports instead of the announced 36%, Thailand's GDP could rebound to 2.5%.
Given the uncertain economic climate, the government needs to speed up the disbursement of the 2025 fiscal budget, according to the FPO director-general Pornchai Thiraveja. For fiscal year 2025, the government aims for a disbursement rate of 94.4%, with current expenditure targeted at 101% and capital investment at 74.8%.
Throughout these testing times, Thailand's economy will depend on swift decision-making, targeted fiscal stimulus, tourism revitalization, and structural reforms. The government must prioritize its investments wisely and only allow urgent investments to proceed amid the expected instability.
- To counteract the negative impacts of the economic turbulence, Thailand aims to integrate more American goods into its imports, particularly agricultural products and energy resources, as part of efforts to rebalance its trading relationship with the US.
- In order to boost foreign investments, particularly in high-tech sectors, the government plans to selectively back ventures and remain active in foreign business opportunities, despite the instability caused by the US tariff policy.
- In the face of a temporary economic downturn, the Thai government has announced proactive measures, such as an expanded version of the "Khun Su, Rao Chuay" household debt relief program, to offer relief to those struggling with debt.
- Amid the instability caused by the US tariff policy, the Fiscal Police Office (FPO) has revised Thailand's GDP growth forecast for 2025 down to 2.1%, but believes that if only a 10% tariff is imposed instead of the announced 36%, the country's GDP could rebound to 2.5%.
