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Bangkok Post
6 days ago
- Business
- Bangkok Post
Thai growth projections upgraded on lower US tariffs
The local private sector has increased its forecast for Thai GDP growth this year to 1.8-2.2%, rising from an estimate of 1.5-2% following the recent US decision to reduce tariffs on imports from Thailand from 36% to 19%. At its meeting on Wednesday, the Joint Standing Committee on Commerce, Industry and Banking cited the US tariff reduction as a key factor contributing to the improved economic outlook. The committee also upgraded its forecast for Thai export growth from -0.5% to 0.3%, rising to a more optimistic 2-3% growth, aligning with positive global economic signals after the latest US tariff announcements for many other countries. Payong Srivanich, chairman of the Thai Bankers' Association, said the 19% reciprocal tariff imposed on Thai goods helps the nation avoid the worst-case scenario of losing competitiveness against neighbouring countries, which are now subject to similar tariff levels. However, Mr Payong cautioned that economic growth in the second half of the year is expected to slow, largely due to persistent export challenges. Headwinds include intensified price competition from import surges, declining foreign arrivals and tourism revenue, and the ongoing Thailand-Cambodia border conflict - all of which could dampen economic performance in the latter half of the year. In addition, Mr Payong said, Thailand is likely to face greater challenges from the final quarter of this year into early 2026. Given this outlook, Thailand needs to pursue business and economic reforms to better prepare for long-term uncertainties, Mr Payong said. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said the US tariff policy should serve as a wake-up call for Thailand to strengthen its long-term competitiveness, particularly in the manufacturing sector and small and medium-sized enterprises. He called for industrial restructuring and identification of priority sectors aligned with national strategies. Thai manufacturers must enhance production processes across supply chains and upstream industries to increase local content, improve productivity and reduce costs. Adoption of technology and innovation, along with workforce upskilling, including both Thai and migrant workers, was essential to building real economic value. Mr Kriengkrai said the private sector is ready to cooperate with the government, especially in providing data support. Thailand lacks critical industry-level structural data, such as the usage of primary and intermediate raw materials and regional value content, he said. To comply with new US export requirements, the private sector has begun collecting baseline data. However, to develop a comprehensive and reliable database, cooperation from public sector agencies is essential. Such data will be critical for policy decisions and international negotiations in the evolving global trade landscape, Mr Kriengkrai said. Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said that despite a US tariff rate regarded as consistent for the region, Thailand still requires economic adjustments in both the short and long term. In the near term, price competition is expected to intensify for both Thai exports and domestic products, which will face growing pressure from increased import competition due to expanded market access, he warned.
Business Times
6 days ago
- Business
- Business Times
Thai business group raises 2025 GDP growth forecast to between 1.8% and 2.2%
[BANGKOK] Thailand's economy is expected to grow 1.8 to 2.2 per cent this year, higher than a previous forecast of 1.5 to 2 per cent, after the US lowered its tariff rate to 19 per cent on imported goods from the country, a leading business group said on Wednesday (Aug 6). The new tariff set last week is significantly lower than the 36 per cent level announced earlier this year and more aligned with other countries in the region. The US was Thailand's largest export market last year, accounting for 18.3 per cent of total shipments, with a value of US$54.96 billion. Exports, a key driver of Thai growth, are now expected to rise between 2 per cent and 3 per cent this year, up from a previous forecast ranging between a 0.5 per cent drop and a rise of 0.3 per cent, the Joint Standing Committee on Commerce, Industry and Banking said. The reduced tariff helps South-east Asia's second-largest economy remains competitive compared with neighbouring countries, it said. One remaining issue relates to US tariffs on transshipments via Thailand from third countries, said Kriengkrai Theinnukul, chairman of the Federation of Thai Industries. 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 next talks (with the US) will focus on how much local content each industry must have,' he told reporters. The economy is likely to slow down in the second half of the year due to weaker exports, increased price competition, a strong baht currency and declining US consumer purchasing power, the business group said. Weaker tourism and a Thai-Cambodian border conflict may further impact the economy, it said. Last month, the finance ministry also raised its 2025 economic growth forecast to 2.2 per cent from 2.1 per cent, after last year's 2.5 per cent expansion lagged peers. REUTERS
Bangkok Post
10-07-2025
- Business
- Bangkok Post
Tariffs part of power struggle
Thailand is caught in a power struggle between global superpowers, with each wanting the nation to take sides by using tariff measures as leverage, says a government official. According to a senior source at the Finance Ministry who requested anonymity, Washington is pressing Thailand to eliminate tariffs on US goods, matching the rate applied to Chinese imports under the Asean-China free trade agreement. "The US's demand for Thailand to reduce import tariffs to 0%, including on agricultural products and meat such as pork, could be seen as having a negative impact on domestic producers. On the other hand, US products are more expensive than Thai products, so it will ultimately be up to consumers to decide," said the source. Finance Minister Pichai Chunhavajira convened a meeting with the Joint Standing Committee on Commerce, Industry and Banking on Wednesday to discuss measures to mitigate the impact of potential US tariffs. Speaking after the meeting, Mr Pichai said the government is preparing measures to cushion the impact on each product group from US President Donald Trump's tariffs. "We must prepare solutions for the possible outcomes, whether they are favourable or moderately favourable. We need to assess who will be affected," he said, adding the negotiation process is continuing ahead of the Aug 1 deadline. Mr Pichai said previously the government broadly assessed how the US tariffs would impact exporters. However, this time the assessment is more detailed as the tariffs vary depending on the product type and its local content. The private sector plans to gradually submit impact data for Mr Pichai's review by Friday. Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said the impact of the Trump tariffs on each product exported to the US varies, depending on the level of local content in each item. The proportion of local content the US will require is still unclear, he said. Mr Poj also expressed concern that tariff negotiations with the US may not be resolved soon, which could result in the US maintaining its proposed 36% tariff on Thai goods, which many analysts in Thailand consider excessively high. "We hope the US will impose a lower tariff rate on Thai products than on Vietnamese products, as Thailand's trade surplus with the US is much smaller," he said. Vietnam has a trade surplus with the US of US$120 billion a year, while Thailand's surplus is only $40 billion. According to the Finance Ministry source, Mr Pichai will chair a meeting today with economic ministers and the prime minister's advisors to discuss measures to address the tariff impacts.
Bangkok Post
09-07-2025
- Business
- Bangkok Post
More detail on US tariff impacts needed, says Pichai
Finance Minister Pichai Chunhavajira says the government is gathering more detailed feedback from the private sector about the potential impacts of US tariffs on Thai exports. With an Aug 1 deadline for reaching an agreement with Washington approaching, he emphasised the need to formulate responses to various possible outcomes, whether favourable or moderately adverse. Discussions are ongoing as Thailand seeks to persuade US officials that its revised trade proposals are sound. The government hopes Washington will agree to a rate lower than 36%, which would be higher than those of key Southeast Asian peers and competitors. 'We must be prepared for every scenario and determine who will be affected,' Mr Pichai said on Wednesday after a meeting with the Joint Standing Committee on Commerce, Industry and Banking. While earlier assessments broadly assumed exporters would bear the brunt of the tariffs, the current analysis is more detailed, he said. The tariffs vary by product type and depend on local content of each item, making the impact uneven across industries, said the finance minister. He added that private sector representatives would submit data on the expected impacts for review by Friday. Poj Aramwattananont, chairman of the Thai Chamber of Commerce, expressed concern prior to the meeting with Mr Pichai. He warned that unresolved negotiations could result in the 36% tariff on Thai products remaining unchanged. 'We hope the US will impose a lower rate on Thailand than those imposed on Vietnam as Thailand's trade surplus with the US is significantly smaller,' said Mr Poj. Vietnam had a trade surplus of $123 billion with the United States last year, compared with a figure of $45 billion for Thailand. Vietnam negotiated an agreement with Washington under which its imports would face a 20% tariff, while Hanoi would impose a zero tariff on US goods, something Thailand does not appear prepared to do. However, Washington will assess a 40% tariff on goods proven to be transshipped — mostly originating in China — or containing very little local Vietnamese content. At the moment, Washington is proposing rates of 25% for Malaysia, 32% for Indonesia and 17% for the Philippines.
Business Times
04-06-2025
- Business
- Business Times
Thai business group cuts 2025 GDP forecast as US tariffs threaten exports
[BANGKOK] Thailand's export engine could stall, and the economy is expected to slow sharply in the second half of the year due to the impact of US tariffs, a leading Thai business group said on Wednesday (Jun 4). The economy was likely to grow by 1.5 per cent to 2.0 per cent this year, down from an earlier forecast of 2.0 per cent to 2.2 per cent, the Joint Standing Committee on Commerce, Industry and Banking said. Committee chair Payong Srivanich said annual growth would fall below 1 per cent in the second half of the year from 3 per cent in the first half, after the group cut its forecast for exports to a range of a drop of 0.5 per cent to a rise of 0.3 per cent, from 0.3 per cent to 0.9 per cent growth previously. Businesses were concerned about the uncertain status of trade negotiations with Washington, and the prospect that other nations could strike a better deal than Thailand. 'We also have to look at our neighbours ... if Vietnam receives a lower tariff than us, the impact will be quite severe,' Federation of Thai Industries chair Kriangkrai Thianuku said. Thailand faces a 36 per cent US tariff if a reduction can't be negotiated before a moratorium expires in July, while Vietnam faces a tariff rate of 46 per cent. Hanoi has held two rounds of talks with Washington. Payong said there were also concerns amongst firms that an appreciating baht would hit their competitiveness. REUTERS
