Latest news with #NationalEconomicandSocialDevelopmentCouncil
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
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.
Business Recorder
19-05-2025
- Business
- Business Recorder
Thai Q1 GDP growth beats expectations, but full-year forecast cut
BANGKOK: Thailand's economy grew more than expected in the first quarter of 2025, data showed on Monday, but the state planning agency cut its full-year growth forecasts as US tariffs threaten to hit the country's export engine. Southeast Asia's second-largest economy grew 3.1% in the January-March quarter from a year earlier, slowing slightly from a revised 3.3% pace in the previous quarter, the National Economic and Social Development Council said. The growth rate was above a median forecast of 2.9% growth in a Reuters poll. On a quarterly basis, the economy grew a seasonally adjusted 0.7% in the March quarter, above the poll forecast of 0.6% growth and 0.4% growth in the prior quarter. Growth at the start of 2025 was helped by private consumption and government expenditure, but high consumer and corporate debt burdens and the global trade war are expected to weigh on activity later in the year, the NESDC said in a statement. Thai consumer confidence hits 7-month low in April due to US tariffs The agency cut its 2025 economic growth forecast to 1.3% to 2.3% from a range of 2.3% to 3.3% seen earlier, and also lowered its forecast for export growth to 1.8% from 3.5%. Foreign tourist arrivals are now seen at 37 million this year, down from an earlier projection of 38 million, the NESDC said. Tourist arrivals hit a record of nearly 40 million in 2019, the year before the COVID-19 pandemic.
Straits Times
19-05-2025
- Business
- Straits Times
Thailand slashes growth forecast amid impact of trade war
The latest forecast is a full percentage point lower than the previous estimate of 2.3 per cent to 3.3 per cent. PHOTO: AFP 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 (GDP) will likely grow 1.3 per cent to 2.3 per cent in 2025, taking into account additional stimulus measures the government is planning, the National Economic and Social Development Council (NESDC) said on May 19. The latest forecast is a full percentage point lower than the previous estimate of 2.3 per cent to 3.3 per cent. The cut more or less aligns the agency's forecast with that of the Bank of Thailand, the World Bank and the International Monetary Fund. If GDP growth comes in at the midpoint, it would be Thailand's weakest 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 per cent 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 as much as 0.8 per cent to its lowest level since April 30. The baht pared its gains to 0.2 per cent against the dollar. South-east Asia's second-largest economy is bracing for a possibility of a 36 per cent tariff in the US, its largest export market. Thailand is waiting to start negotiations with Washington. 'The negotiation results will dictate the Thai economic outlook going forward,' Mr Danucha added. '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 per cent in 2025, down from the previous estimate of 3.5 per cent and the 5.8 per cent notched in 2024. Machinery and electronics are at risk of losing market share in the US from the higher tariffs, Mr Danucha said. Private investment is projected to decline 0.7 per cent in 2025, in line with the export slowdown. Private consumption, which accounts for the bulk of Thai GDP, is seen expanding just 2.4 per cent, down from the previous estimate of 3.3 per cent and 4.4 per cent 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, Mr Danucha added. 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 per cent from a year earlier, beating the 2.9 per cent median estimate in a Bloomberg News survey and comparing with a revised 3.3 per cent pace logged in the previous three months. The economy expanded 0.7 per cent quarter-on-quarter, compared with a median estimate for 0.5 per cent 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 in 2025 to 37 million from 38 million. The government will hold a meeting on May 19 to discuss ways to support the economy. However, limited monetary and fiscal space could constrain the nation's ability to respond. 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 in Apri l as the trade war weighs on its economic and fiscal strength. The Bank of Thailand has 'very limited ammunition' after 75-basis points in cuts brought its benchmark key interest rate to 1.75 per cent, governor Sethaput Suthiwartnarueput said earlier in Ma y. The central bank has warned that GDP growth in 2025 could fall to as low as 1.3 per cent – the slowest pace since the pandemic – in case of a severe trade war and higher US tariffs. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
