Latest news with #DanuchaPichayanan
Malaysian Reserve
19-05-2025
- Business
- Malaysian Reserve
Thailand slashes growth forecast on impact of trade war
THAILAND significantly lowered its forecast for economic growth this year as the global trade war undercuts private investment and exports, adding to already-weak consumption at home. Gross domestic product will likely grow 1.3% to 2.3% in 2025, the National Economic and Social Development Council said on Monday. The latest forecast is a full percentage point lower than the previous estimate of 2.3% to 3.3% and more or less aligns it with that of the Bank of Thailand, the World Bank and the International Monetary Fund. Following the dire outlook, the government decided to put on hold a planned cash handout program and instead use about 157 billion baht ($4.8 billion) budgeted for it to support projects which will generate more jobs and boost competitiveness of the local industries. If the full-year GDP outturn comes in at the midpoint, it would be Thailand's weakest print since the pandemic, according to Bloomberg-compiled data. It could take around two years for the economy to recover from the impact of a threatened 36% US tariff and a global trade slowdown, NESDC chief Danucha Pichayanan said at a briefing in Bangkok. 'Economic growth remains constrained by high household and corporate debt burdens and it is expected the growth to be softened in the second half of the year, following the global economic and trade slowdown and the impact of trade protection measures,' it said in a statement. The benchmark SET Index fell 0.7% to its lowest close since April 29. The baht, which pared gains after the release of the data, was 0.9% higher at 33.07 to a dollar by 4:30 p.m. local time. Southeast Asia's second-largest economy is bracing for the possibility of a 36% tariff in the US, its largest export market. Thailand is waiting to start negotiations with Washington to bring down the levies. 'The negotiation results will dictate the Thai economic outlook going forward,' Danucha said. 'If the situation remains relaxed like this, our economy should continue to grow without problem. If not, the situation will change.' Exports will likely grow just 1.8% this year, down from the previous estimate of 3.5% and the 5.8% in notched 2024. Machinery and electronics are Thai exports at risk of losing market share in the US market from the higher tariffs, Danucha said. Private investment is projected to decline 0.7% in 2025, in line with the exports slowdown. Private consumption, which accounts for the bulk of Thai GDP, is seen growing just 2.4%, down from the previous estimate of 3.3% and the 4.4% in 2024. Government stimulus should boost public consumption and investment, NESDC said. While Thailand's economy grew at a faster-than-expected pace last quarter, it was largely driven by a surge in exports as businesses front-loaded orders in a bid to avoid the Trump tariffs. 'The trade situation and foreign exchange may be more volatile and the economy may slow down going forward,' with the impact more clear in the third quarter, Danucha said. He warned businesses and consumers to brace for the risks and be cautious with their spending. GDP in the January-March period rose 3.1% from a year earlier, beating the 2.9% median estimate in a Bloomberg News survey and comparing to the revised 3.3% pace notched in previous three months. The economy expanded 0.7% quarter-on-quarter, compared with a median estimate for 0.5% growth. A global trade war would exacerbate Thailand's already sluggish recovery post-pandemic, with local consumption remaining tepid despite cash handouts, and China's slowdown hitting the tourism sector. NESDC cut its forecast for tourist arrivals this year to 37 million from 38 million. Prime Minister Paetongtarn Shinawatra has pledged new stimulus measures, but they may come at the cost of bloating still-elevated government debt levels. Moody's Ratings lowered Thailand's credit rating outlook to negative from stable last month as the trade war weighs on its economic and fiscal strength. The prime minister said some programs are being reviewed in view of an expected shortfall in revenue as the trade war is affecting all countries. New government-initiated projects may help boost growth between 0.7 to 1 percentage point, Finance Minister Pichai Chunhavajira told reporters. The Bank of Thailand also has 'very limited ammunition' after 75-basis points in cuts brought its benchmark key interest rate to 1.75%, Governor Sethaput Suthiwartnarueput said earlier this month. The central bank has warned that GDP growth this year could fall to as low as 1.3% — the slowest pace since the pandemic — in case of a severe trade war and higher US levies. –BLOOMBERG
Business Times
19-05-2025
- Business
- Business Times
Thailand Q1 GDP growth beats forecast, but full-year forecast cut due to tariffs
[BANGKOK] Thailand's economy grew more than expected in the first quarter of 2025, data showed on Monday (May 19), but the state planning agency slashed its full-year growth and trade forecasts as US tariffs threaten the country's export engine. Thailand faces a 36 per cent tariff on shipments to the US, its biggest export market, if a reduction cannot be negotiated before a moratorium expires in July. The economy grew 3.1 per cent in the January-to-March quarter from a year earlier, the National Economic and Social Development Council (NESDC) said, above market expectations of 2.9 per cent growth and just below the 3.3 per cent pace in the previous quarter, the National Economic and Social Development Council said. The agency cut its 2025 economic growth forecast to 1.3 to 2.3 per cent from a range of 2.3 to 3.3 per cent seen earlier, saying high consumer and corporate debt burdens and the global trade war are expected to weigh on activity later in the year. 'This is not too pessimistic... and can be adjusted according to the changing situation,' NESDC head Danucha Pichayanan told a news conference. 'The impact of the US tariffs on the Thai economy is expected to last about two years as the economy already has structural problems,' he said. 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 NESDC cut its forecast for export growth this year to 1.8 per cent from 3.5 per cent. The main Thai stock index and the baht dropped slightly after the GDP data. 'Negative quarter-on-quarter GDP may be seen in the second half of the year,' Siam Commercial Bank economist Poonyawat Sreesing said, adding he expected two more interest rate cuts this year as the US tariffs slow economic activity. On a quarterly basis, South-east Asia's second-largest economy grew a seasonally adjusted 0.7 per cent in the March quarter, above the poll forecast of 0.6 per cent growth and 0.4 per cent growth in the prior quarter. The US tariffs were announced in early April, and while full implementation has been delayed there is a 10 per cent interim rate on shipments. Danucha said growth could slow in the current quarter as the private sector waited for clarity on the tariffs, but noted the government had prepared 200 billion baht (S$7.8 billion) for stimulus measures. Industrial sentiment fell to a six-month low in April due to concerns about the tariffs, the Federation of Thai Industries said on Monday. The NESDC also lowered its forecast for foreign tourist arrivals to 37 million this year, from 38 million seen earlier, with Chinese tourists, the biggest source market, projected at five million. Tourist arrivals hit a record of nearly 40 million in 2019, the year before the Covid-19 pandemic. REUTERS
Free Malaysia Today
19-05-2025
- Business
- Free Malaysia Today
Thailand cuts growth forecast on tariff uncertainty
Thailand cut the forecast for tourists from 38 million to 37 million after a drop in the number of Chinese visitors in the first quarter. (EPA Images pic) BANGKOK : Thailand has downgraded its 2025 economic forecast due to uncertainty over trade tariffs threatened by US President Donald Trump, senior officials said today. The Southeast Asian country faces a 36% levy as part of sweeping global 'reciprocal' tariffs proposed by Washington unless a reduction can be agreed by July. The office of national economic and social development council (NESDC) said today that the economy grew by 3.1% from January-March compared with a year earlier. However, it lowered the growth forecast for the year to between 1.3% and 2.3%, down from 2.3% to 3.3%. Danucha Pichayanan, secretary-general of the NESDC, blamed tariff uncertainty as well as a projected drop in tourist numbers in 2025 for the downgrade. 'The (trade) talks have not yet concluded and there are several countries waiting in line to discuss,' he told a news conference. He said the economic situation in the second quarter was likely to be slow, with the private sector delaying investments until the results of the trade talks emerge. Thailand also cut the forecast for tourists in 2025 to 37 million from 38 million after a drop in the number of Chinese tourists in the first quarter.
Malay Mail
19-05-2025
- Business
- Malay Mail
Thailand cuts 2025 growth forecast as US tariff threat looms and Chinese tourism dips
BANGKOK, May 19 — Thailand has downgraded its 2025 economic forecast due to uncertainty over trade tariffs threatened by US President Donald Trump, senior officials said today. The Southeast Asian country faces a 36 percent levy as part of sweeping global 'reciprocal' tariffs proposed by Washington unless a reduction can be agreed by July. The Office of National Economic and Social Development Council (NESDC) said today that the economy grew by 3.1 percent from January-March compared with a year earlier. However, it lowered the growth forecast for the year to between 1.3 percent and 2.3 percent, down from 2.3 percent to 3.3 percent Danucha Pichayanan, secretary general of the NESDC, blamed tariff uncertainty as well as a projected drop in tourist numbers in 2025 for the downgrade. 'The (trade) talks have not yet concluded and there are several countries waiting in line to discuss,' he told a news conference. He said the economic situation in the second quarter was likely to be slow, with the private sector delaying investments until the results of the trade talks emerge. Thailand also cut the forecast for tourists in 2025 to 37 million from 38 million after a drop in the number of Chinese tourists in the first quarter. — AFP
New Straits Times
19-05-2025
- Business
- New Straits Times
Thai Q1 GDP growth beats forecast, but full-year forecast cut due to tariffs
BANGKOK: Thailand's economy grew more than expected in the first quarter of 2025, data showed on Monday, but the state planning agency slashed its full-year growth and trade forecasts as US tariffs threaten the country's export engine. Thailand faces a 36 per cent tariff on shipments to the US, its biggest export market, if a reduction cannot be negotiated before a moratorium expires in July. The economy grew 3.10 per cent in the January-March quarter from a year earlier, the National Economic and Social Development Council (NESDC) said, above market expectations of 2.90 per cent growth and just below the 3.30 per cent pace in the previous quarter, the NESDC said. The agency cut its 2025 economic growth forecast to between 1.30 per cent and 2.30 per cent from a range of 2.30 per cent to 3.30 per cent seen earlier, saying high consumer and corporate debt burdens and the global trade war are expected to weigh on activity later in the year. "This is not too pessimistic... and can be adjusted according to the changing situation," NESDC head Danucha Pichayanan told a news conference. "The impact of the US tariffs on the Thai economy is expected to last about two years as the economy already has structural problems," he said. The NESDC cut its forecast for export growth this year to 1.80 per cent from 3.50 per cent. The main Thai stock index and the baht dropped slightly after the GDP data. "Negative quarter-on-quarter GDP may be seen in the second half of the year," Siam Commercial Bank economist Poonyawat Sreesing said, adding he expected two more interest rate cuts this year as the US tariffs slow economic activity. On a quarterly basis, Southeast Asia's second-largest economy grew a seasonally adjusted 0.70 per cent in the March quarter, above the poll forecast of 0.60 per cent growth and 0.40 per cent growth in the prior quarter. The US tariffs were announced in early April, and while full implementation has been delayed there is a 10 per cent interim rate on shipments. Danucha said growth could slow in the current quarter as the private sector waited for clarity on the tariffs, but noted the government had prepared RM200 billion (US$6 billion) for stimulus measures. Industrial sentiment fell to a six-month low in April due to concerns about the tariffs, the Federation of Thai Industries said on Monday. The NESDC also lowered its forecast for foreign tourist arrivals to 37 million this year, from 38 million seen earlier, with Chinese tourists, the biggest source market, projected at five million. Tourist arrivals hit a record of nearly 40 million in 2019, the year before the COVID-19 pandemic.
