Latest news with #Danucha
Bangkok Post
3 hours ago
- Business
- Bangkok Post
Thai growth forecast receives upgrade
The government's planning unit has raised the median estimate of Thailand's GDP growth forecast for this year to 2%, from an earlier estimate of 1.8%, citing greater clarity on US President Donald Trump's tariff policy. According to Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), the council now projects GDP growth in a range of 1.8–2.3%, with a midpoint of 2%. This revision raises the lower bound of the previous forecast range of 1.3–2.3% (announced on May 19), which had a midpoint of 1.8%. He explained that the clearer outlook on reciprocal tariffs -- with Thailand receiving a 19% rate, similar to the regional average -- has benefited the country's export sector. Export value in US dollars for the full year is now expected to expand by 5.5%, higher than the 1.8% growth projected on May 19. This export recovery is expected to positively impact manufacturing and private investment. Private investment this year is now forecast to grow by 1%, compared to the earlier projection of a 0.7% contraction on May 19, and improving from last year's 1.6% contraction. As for foreign tourist arrivals, the NESDC has revised down its forecast to 33 million for this year, from 37 million projected on May 19, citing a sharp 12.2% decline in arrivals in the second quarter. A major factor is the lower-than-expected number of Chinese tourists, now estimated at only 4 million this year, compared to the earlier forecast of 6 million. However, average tourist spending per person per trip is expected to rise to 47,000–48,000 baht, up from 42,000 baht last year. As a result, tourism revenue is projected at 1.57 trillion baht, down from 1.71 trillion baht forecast in May. According to Mr Danucha, global GDP growth this year is expected at 3%, better than the previous forecast of 2.6%. The US is projected to grow by 1.8%, China by 4.6%, and global trade volume is expected to expand by 2.7%, up from the previous 1.8% forecast. For the second quarter of this year, Mr Danucha on Monday reported that the Thai economy grew 2.8% year-on-year. Seasonally adjusted GDP rose 0.6% from the first quarter. However, the growth in the second quarter was lower than the 3.2% in the first quarter, due mainly to a slowdown in tourism-related services. GDP in the third quarter is expected to come in below the first two quarters, he said. Mr Danucha said that to accelerate economic growth for the remainder of the year, it was essential for the responsible parties to focus on measures to mitigate the impact of US tariffs and the retaliatory actions of key trading partners, to support the recovery of the tourism sector and related services, to drive private investment, and to provide financial assistance to businesses, particularly SMEs, that face difficulties in accessing liquidity and are further affected by trade restriction measures. The government is also being urged to expedite budget disbursement to promptly inject government spending into the economy and support agricultural production and farmers' income. He noted that Thailand's economy is expanding below its potential growth rate of 3% due to structural problems. New industries must be persuaded to invest in Thailand to strengthen exports -- a process expected to take 2–3 years. In terms of economic stability, the NESDC on Monday reported that the unemployment rate stood at 0.91% in the second quarter, slightly higher than 0.89% in the previous quarter but lower than 1.07% in the same quarter of the previous year. Headline inflation turned negative for the first time in five quarters, at -0.3%, while core inflation stood at 1%. The current account recorded a surplus of US$600 million or about 17.1 billion baht. At the end of June 2025, international reserves stood at $262.4 billion, and public debt amounted to 12 trillion baht, accounting for 64.2% of GDP. DOWNBEAT ON H2 OUTLOOK Pichai Lertsupongkit, chief commercial officer of InnovestX Securities, said second-quarter GDP is relatively in line with market forecasts of around 2.5-2.8%, thanks mainly to the frontloading effect ahead of Aug 7, when the US tariffs took effect. Nonetheless, exports are likely to decelerate drastically in the second half, prompting the brokerage to believe that GDP will expand by just 0.4%. Consequently, GDP is expected to expand by less than 2% for the entire year. While analysts will closely monitor Federal Reserve chair Jerome Powell's speech at the Jackson Hole Economic Policy Symposium late this week to digest the US central bank's monetary policy direction, Mr Pichai said Thai interest rates have been clearly on a downward trend. The brokerage is now seeing the possibility that the Bank of Thailand's Monetary Policy Committee might slash rates again at its Oct 8 meeting, following the cut last week, he noted. Poonyawat Sriesing, senior economist at SCB EIC, said the research arm of Siam Commercial Bank is finalising its GDP forecast for 2025, which is likely to be upgraded to 1-8-1.9%, from 1.5% in the July estimates. However, risks are mounting in most economic indicators, especially exports, public investments, and tourism, he told the Bangkok Post. "Exports are likely to see a decline from July onwards. We are projecting that overseas shipments contract by double digits in the fourth quarter," said Mr Poonyawat. State investments are projected to slow down in the third and fourth quarters of the year, following the acceleration seen in the first two quarters, as limited funds are available. Tourism, another major driver of the Thai economy, has also remained in the doldrums. "We are also revising the estimates of overall international arrivals this year, now projecting at around 33 million, down from 35.5 million in 2024," Mr Poonyawat said. SCB EIC expects the central bank to cut rates again in the fourth quarter, most likely in December, to shore up economic growth, he added.
Business Times
a day ago
- Business
- Business Times
Thailand warns of hit from US tariffs even as Q2 growth beats forecast
[BANGKOK] Thailand's top economic council called for urgent structural reforms as exports are threatened by US tariffs, even after second-quarter growth surpassed estimates on a rush by businesses to ship goods to beat the new levies. Gross domestic product in the three months through June rose 2.8 per cent from a year earlier, the National Economic and Social Development Council (NESDC) said on Monday (Aug 18). That exceeded the 2.7 per cent median estimate in a Bloomberg News survey, and compared with a 3.2 per cent pace in the first quarter. The baht was little changed at 32.44 to the US dollar after the data, which showed that exports had countered a weak domestic economic performance. Thailand's benchmark SET Index fell 0.3 per cent, headed for its third straight day of losses. The nation is bracing for a potentially prolonged bout of economic weakness, thanks to the recently imposed 19 per cent tariff on shipments to the US, its biggest export market. Tourism has also faltered, while sentiment has not been helped by a bout of domestic political instability which has seen the prime minister suspended from office. There were also recent, deadly border clashes with Cambodia. Frontloading goods Like other Asian economies in the first half of 2025, Thailand appears to have benefited from the frontloading of exports ahead of President Donald Trump's tariffs. But even though its 19 per cent levy is in line with that of most South-east Asian nations, NESDC chief Danucha Pichayanan said Thailand risks losing out to its neighbours. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'The impact of US tariffs is the biggest challenge for the Thai economy,' he said at a briefing in Bangkok. 'We are still facing a risk of losing market share in some products. Our effective tax rate is still higher in some products. So, we need to adjust ourselves.' Thailand is likely to retain its market share in rice, rubber, motorcycles and raw materials for pet food, but could lose sales in telephones, hard disk drives, machinery and auto parts, the NESDC said. The Thai economy grew 3 per cent in the first six months of 2025, and Danucha said the economy can still grow in the second half, but the pace won't be as high as 2 per cent-3 per cent. 'The Thai economy has structural problems, so it's hard for us to have high growth at our potential level of around 3 per cent,' Danucha said, cautioning that efforts to restructure the economy are taking time. 'The US tariffs may help accelerate our economic reform.' The council's call for reform echoes concerns among analysts. Moody's warning 'Thailand's growth potential is likely to weaken further as limited progress on long-term reforms, domestic political uncertainty and heightened global trade instability compound deep-rooted structural issues,' Moody's Ratings said in a report last week. 'The weakening economic outlook will curb scope for fiscal consolidation amid tepid revenue growth and little room for additional spending cuts.' Danucha said the recent border conflict with Cambodia is unlikely to have a major impact on the economy, as the affected areas are not significant industrial zones. And Cambodian workers who have left Thailand can be replaced by staff from other countries, he said. But the council now expects only four million Chinese tourist arrivals this year, down from a six million forecast, as Chinese travellers opt for other destinations such as Japan. The economy grew 0.6 per cent from the first quarter, beating the 0.5 per cent forecast. The government tweaked its 2025 outlook to a range of 1.8 to 2.3 per cent from 1.3 to 2.3 per cent, effectively lifting the midpoint from 1.8 to 2 per cent. Political situation Those estimates don't take into account the domestic political situation, according to the council, which noted that the 2026 budget has almost been finalised. The Bank of Thailand last week cut the nation's benchmark rate for the fourth time since October to help support the fragile economy. Monday's data showed continued domestic weakness. 'The milder-than-expected slowdown in Thailand's GDP growth in the second quarter doesn't mean the Bank of Thailand is finished easing,' said Tamara Mast Henderson, Asean economist for Bloomberg Economics. 'With tourism slumping, the climate for investment weak, the front-loading boost to exports poised to end, and US tariffs set to bite harder, we expect the BOT to cut its key rate by 25 basis points to 1.25 per cent at its next meeting in October.' 'Export of goods continued to grow favourably, while private investment returned to expansion,' the council said in a statement. 'Meanwhile, private consumption expenditure, government consumption expenditure, public investment, and export of services decelerated.' The nation's biggest private sector group earlier this month raised its 2025 growth forecast to 1.8 to 2.2 per cent after Thailand secured the 19 per cent US levy, which is lower than the earlier threatened 36 per cent. Still, it warned that intense price competition, a strong baht and the slowdown in tourism could weigh on the economy in the second half of the year. BLOOMBERG
Yahoo
a day ago
- Business
- Yahoo
Thailand Warns of Hit From US Tariffs Even as Growth Beats
(Bloomberg) -- Thailand's top economic council called for urgent structural reforms as exports are threatened by US tariffs, even after second-quarter growth surpassed estimates on a rush by businesses to ship goods to beat the new levies. Gross domestic product in the three months through June rose 2.8% from a year earlier, the National Economic and Social Development Council said Monday. That exceeded the 2.7% median estimate in a Bloomberg News survey, and compared with a 3.2% pace in the first quarter. The US-Canadian Road Safety Gap Is Getting Wider A Photographer's Pipe Dream: Capturing New York's Vast Water System Festivals and Parades Are Canceled Amid US Immigration Anxiety A London Apartment Tower With Echoes of Victorian Rail and Ancient Rome Princeton Plans New Budget Cuts as Pressure From Trump Builds The baht was little changed at 32.44 to the US dollar after the data, which showed that exports had countered a weak domestic economic performance. Thailand's benchmark SET Index fell 0.3%, headed for its third straight day of losses. The Southeast Asian nation is bracing for a potentially prolonged bout of economic weakness, thanks to the recently imposed 19% tariff on shipments to the US, its biggest export market. Tourism has also faltered, while sentiment hasn't been helped by a bout of domestic political instability which has seen the prime minister suspended from office. There were also recent, deadly border clashes with Cambodia. Frontloading Goods Like other Asian economies in the first half of 2025, Thailand appears to have benefited from the frontloading of exports ahead of President Donald Trump's tariffs. But even though its 19% levy is in line with that of most Southeast Asian nations, NESDC chief Danucha Pichayanan said Thailand risks losing out to its neighbors. 'The impact of US tariffs is the biggest challenge for the Thai economy,' Danucha at a briefing in Bangkok. 'We are still facing a risk of losing market share in some products. Our effective tax rate is still higher in some products. So, we need to adjust ourselves.' Thailand is likely to retain its market share in rice, rubber, motorcycles and raw materials for pet food, but could lose sales in telephones, hard disk drives, machinery and auto parts, the NESDC said. The Thai economy grew 3% in the first six months of 2025, and Danucha said the economy can still grow in the second half, but the pace won't be as high as 2%-3%. 'The Thai economy has structural problems, so it's hard for us to have high growth at our potential level of around 3%,' Danucha said, cautioning that efforts to restructure the economy are taking time. 'The US tariffs may help accelerate our economic reform.' The council's call for reform echoes concerns among analysts. Moody's Warning 'Thailand's growth potential is likely to weaken further as limited progress on long-term reforms, domestic political uncertainty and heightened global trade instability compound deep-rooted structural issues,' Moody's Ratings said in a report last week. 'The weakening economic outlook will curb scope for fiscal consolidation amid tepid revenue growth and little room for additional spending cuts.' Danucha said the recent border conflict with Cambodia is unlikely to have a major impact on the economy, as the affected areas are not significant industrial zones. And Cambodian workers who have left Thailand can be replaced by staff from other countries, he said. But the council now expects only 4 million Chinese tourist arrivals this year, down from a 6 million forecast, as Chinese travelers opt for other destinations such as Japan. The economy grew 0.6% from the first quarter, beating the 0.5% forecast. The government tweaked its 2025 outlook to a range of 1.8% to 2.3% from 1.3% to 2.3%, effectively lifting the midpoint from 1.8% to 2%. Political Situation Those estimates don't take into account the domestic political situation, according to the council, which noted that the 2026 budget has almost been finalized. The Bank of Thailand last week cut the nation's benchmark rate for the fourth time since October to help support the fragile economy. Monday's data showed continued domestic weakness. What Bloomberg Economics Says... The milder-than-expected slowdown in Thailand's GDP growth in the second quarter doesn't mean the Bank of Thailand is finished easing. With tourism slumping, the climate for investment weak, the front-loading boost to exports poised to end, and US tariffs set to bite harder, we expect the BOT to cut its key rate by 25 basis points to 1.25% at its next meeting in October. — Tamara Mast Henderson, Asean economist For the full note, click here 'Export of goods continued to grow favorably, while private investment returned to expansion,' the council said in a statement. 'Meanwhile, private consumption expenditure, government consumption expenditure, public investment, and export of services decelerated.' The nation's biggest private sector group earlier this month raised its 2025 growth forecast to 1.8%-2.2% after Thailand secured the 19% US levy, which is lower than the earlier threatened 36%. Still, it warned that intense price competition, a strong baht and the slowdown in tourism could weigh on the economy in the second half of the year. --With assistance from Shinjini Datta. (Adds details throughout.) 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Bangkok Post
a day ago
- Business
- Bangkok Post
Thailand warns of hit from US tariffs even as growth beats forecast
Thailand's top economic council called for urgent structural reforms as exports are threatened by US tariffs, even after second-quarter growth surpassed estimates on a rush by businesses to ship goods to beat the new levies. Gross domestic product in the three months through June rose 2.8% from a year earlier, the National Economic and Social Development Council said on Monday. That exceeded the 2.7% median estimate in a Bloomberg News survey, and compared with a 3.2% pace in the first quarter. The baht was little changed at 32.44 to the US dollar after the data, which showed that exports had countered a weak domestic economic performance. Thailand's benchmark SET Index fell 0.3%, headed for its third straight day of losses. The kingdom is bracing for a potentially prolonged bout of economic weakness, thanks to the r ecently imposed 19% tariff on shipments to the US, its biggest export market. Tourism has also faltered, while sentiment hasn't been helped by a bout of domestic political instability which has seen the prime minister suspended from office. There were also recent, deadly border clashes with Cambodia. Frontloading goods Like other Asian economies in the first half of 2025, Thailand appears to have benefited from the frontloading of exports ahead of President Donald Trump's tariffs. But even though its 19% levy is in line with that of most Southeast Asian nations, NESDC chief Danucha Pichayanan said Thailand risks losing out to its neighbours. 'The impact of US tariffs is the biggest challenge for the Thai economy,' Mr Danucha said at a briefing in Bangkok. 'We are still facing a risk of losing market share in some products. Our effective tax rate is still higher in some products. So, we need to adjust ourselves.' Thailand is likely to retain its market share in rice, rubber, motorcycles and raw materials for pet food, but could lose sales in telephones, hard disk drives, machinery and auto parts, the NESDC said. The Thai economy grew 3% in the first six months of 2025, and Mr Danucha said the economy can still grow in the second half, but the pace won't be as high as 2%-3%. 'The Thai economy has structural problems, so it's hard for us to have high growth at our potential level of around 3%,' Mr Danucha said, cautioning that efforts to restructure the economy are taking time. 'The US tariffs may help accelerate our economic reform.' The council's call for reform echoes concerns among analysts. Moody's warning 'Thailand's growth potential is likely to weaken further as limited progress on long-term reforms, domestic political uncertainty and heightened global trade instability compound deep-rooted structural issues,' Moody's Ratings said in a report last week. 'The weakening economic outlook will curb scope for fiscal consolidation amid tepid revenue growth and little room for additional spending cuts.' Mr Danucha said the recent border conflict with Cambodia is unlikely to have a major impact on the economy, as the affected areas are not significant industrial zones. And Cambodian workers who have left Thailand can be replaced by staff from other countries, he said. But the council now expects only 4 million Chinese tourist arrivals this year, down from a 6 million forecast, as Chinese travellers opt for other destinations such as Japan. The economy grew 0.6% from the first quarter, beating the 0.5% forecast. The government tweaked its 2025 outlook to a range of 1.8% to 2.3% from 1.3% to 2.3%, effectively lifting the midpoint from 1.8% to 2%. Political situation Those estimates don't take into account the domestic political situation, according to the council, which noted that the 2026 budget has almost been finalised. The Bank of Thailand last week cut the nation's benchmark rate for the fourth time since October to help support the fragile economy. Monday's data showed continued domestic weakness. 'Export of goods continued to grow favourably, while private investment returned to expansion,' the council said in a statement. 'Meanwhile, private consumption expenditure, government consumption expenditure, public investment, and export of services decelerated.' The nation's biggest private sector group earlier this month raised its 2025 growth forecast to 1.8%-2.2% after Thailand secured the 19% US levy, which is lower than the earlier threatened 36%. Still, it warned that intense price competition, a strong baht and the slowdown in tourism could weigh on the economy in the second half of the year.
The Star
a day ago
- Business
- The Star
Thailand's Q2 growth beats forecast but faces slowdown in H2 on tariffs
An employee operates a semiconductor die engraving machine at a Hana Microelectronics Pcl factory in Bang Pa-In, Ayutthaya Province, Thailand, on Wednesday, Aug. 13, 2025. Thailand's exports and manufacturing improved in the second quarter of 2025. - Bloomberg BANGKOK: Thailand's economy expanded faster than expected in the second quarter on strong export growth ahead of US tariffs taking full effect, but momentum is likely to slow over the rest of the year, the state planning agency said on Monday (Aug 18). South-East Asia's second-largest economy grew 2.8 per cent in the April-June quarter from a year earlier, the National Economic and Social Development Council said, beating a Reuters poll forecast of 2.5 per cent, but still below the 3.2 per cent annual increase in the first three months. The economy grew three per cent annually in the first half, and the council adjusted its full-year forecast to 1.8 to 2.3 per cent, from an earlier estimate of 1.3 to 2.3 per cent. "Exports and manufacturing improved, along with clarity over reciprocal tariffs, so the Thai economy should expand more than our projections in May," the council's head, Danucha Pichayanan, told a news conference. The US tariff on Thai imports has been set at 19 per cent, in line with regional peers. "Growth should be good in the remainder (of the year), but will be lower than the previous two quarters," Danucha added. Last year's annual growth of 2.5 per cent lagged other countries in the region. The council raised its 2025 export growth forecast to 5.5 per cent from 1.8 per cent, after a 15 per cent year-on-year rise in the first half, driven by shippers racing to beat US tariffs. However, exports are expected to taper in the second half. The United States was Thailand's biggest export market last year, accounting for 18.3 per cent of total shipments, with a value of US$55 billion, but there are still uncertainties relating to tariffs on transshipments via Thailand from third countries. Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank, said he predicts a final growth rate of just 1.5 per cent for 2025. "Growth is seen to decelerate markedly post the sugar high of exports front loading," he said, adding that waning tourist numbers and household debt would also weigh heavily on the economy. The NESDC on Monday also lowered its forecast for foreign tourist arrivals this year by 10 per cent to 33 million. On Friday, parliament passed the government's 3.78 trillion baht (US$116.6 billion) budget bill for the 2026 fiscal year starting on October 1, which is expected to boost economic activity. The central bank last week also cut its key interest rate by a quarter point to a near three-year low of 1.50 per cent, with more easing expected later this year. - Reuters
