15-07-2025
Call for steps to curb impact of tariffs
Thailand's competitiveness will be severely damaged if the government fails to implement measures to curb the adverse impacts of US tariffs, said Siri Ganjarerndee, former Bank of Thailand assistant governor and current chairman of Tris Rating.
Addressing a forum co-hosted by Tris Rating and S&P Global Ratings on Tuesday, Mr Siri said the ongoing global trade situation is not in accordance with the World Trade Organisation's (WTO) principles, but largely influenced by geopolitics and non-economic factors used by powerful nations.
The abrupt changes seem to have been caused by the use of bargaining power by the powerful countries to rapidly solve the internal economic issues that have been building up for a long time.
"The current situation presents significant risks for Thailand, which has a high degree of openness and has heavily relied on exports and tourism for several decades," Mr Siri said.
"These ongoing challenges will certainly affect economic growth and stability, as well as damaging Thailand's competitiveness for a long time to come, so we need to figure out how to react to the changes in a timely and proper manner."
According to Mr Siri, many parts of the international community are worried that the non-WTO approach could lead to a severe global economic recession.
"The implementation of tariffs on a significant scale will distort the use of resources of the world and each country much more than is necessary amid the ongoing uncertainties," he noted.
Sakda Pongcharoenyong, president of Tris Rating, said Tris downgraded Thailand's 2025 GDP growth estimate to 1.8%, from more than 2%, when the US first announced the reciprocal tariff policy earlier this year.
"The current estimate is not for the worst-case scenario with Thailand facing high US tariffs. It could be further downgraded when we know exactly how much the rate to be charged on Thai exports will be on Aug 1," he said.
Louis Kuijs, APAC chief economist at S&P Global Ratings, said the impacts of the tariffs on Thailand's GDP would be realised next year, but declined to comment on exactly how much.
Significantly higher US tariffs and increased uncertainty about them will weigh on growth. Solid domestic demand should contain the slowdown to varying degrees, especially in economies less exposed to trade, he said.
"In Thailand, growth was already modest in 2024, and fiscal stimulus has dampened the slowdown in 2025. That is why we don't project a major slowdown in Thailand this year," noted Mr Kuijs.
"Domestic resilience is helping to contain the slowdown that we expect for 2025. Thailand, of course, is not very domestically oriented and the country is one of the most export-oriented economies in the APAC region. Meanwhile, the domestic path has not been as resilient as it has been among some of the neighbours."
Kim Eng Tan, managing director for sovereign and international public finance ratings at S&P Global Ratings, said political uncertainty in Thailand is also a concerning factor.
"Thailand has faced significant challenges. The government needs to be able to sit down and plan long term," he said. "The longer you wait to do that, the more difficult it will be to do something about it."
