Thailand's economic outlook for 2025 has taken a significant hit, with Trisco Ratings revising its GDP growth forecast down from 2.8% to 1.8%. This adjustment comes in light of the impact of U.S. import tariffs and a slowdown in exports and imports, as detailed in a recent report by HoonSmart.com.
According to Trisco, the export growth projection has been slashed from 3.1% to just 0.9%. Imports are also expected to decline, from a previous estimate of 2.5% growth to only 1.3%. The repercussions of these changes are profound, particularly given that the U.S. is Thailand's largest export market.
Furthermore, the anticipated number of international tourists visiting Thailand is forecasted to drop from 38.2 million to 36 million. This decline is largely attributed to the slow recovery of the Chinese economy, which has been further hampered by U.S. tariffs.
Trisco's report highlights the increasing uncertainty in the global economic environment, which is causing private sector investment to wane. Investment growth is now predicted to fall from 3% to 2.6%, while consumer spending growth is expected to slow from 3.4% to 3.1%. The report underscores that the U.S.'s monetary policy uncertainty is contributing to fluctuations in exchange rates and global capital markets.
The revised forecasts are based on a baseline assumption that negotiations with the U.S. will result in a temporary halt to retaliatory tariffs for 90 days. Despite a potential reduction in tariff rates, the overall impact on Thailand's economy is expected to be significant, especially in the latter half of 2025.
Trisco has also outlined a worst-case scenario in which the 36% retaliatory tariff imposed by the U.S. remains in place, which could lead to even more severe economic consequences for Thailand. The ongoing uncertainty regarding U.S. trade policy will likely persist, complicating the economic landscape for Thailand and other trading partners.
In addition to these economic concerns, the geopolitical tensions continue to pose a significant risk to the global economic system. Such tensions could disrupt supply chains, increase energy costs, and contribute to a global economic slowdown.
In a related development, the Thai government is taking steps to address the challenges faced by its rubber industry. Ms. Narumon Pinyosinwat, the Minister of Agriculture and Cooperatives, recently announced that Thailand has become the world's leading producer and exporter of rubber, with exports reaching 3.96 million tons in 2024. This figure includes a significant volume of STR rubber, which accounted for 1.76 million tons of the total exports.
During a recent meeting of the Rubber Control Committee, Narumon emphasized the need for collaboration between the government, private sector, and farmers to tackle the issue of falling rubber prices. The government is working on measures to stabilize prices and combat illegal rubber trade, which undermines the industry.
"We recognize the struggles of farmers and are committed to ensuring fair prices for rubber," Narumon stated. She highlighted the importance of maintaining a balance between the private sector and farmers to ensure the sustainability of the agricultural industry.
Moreover, the Ministry of Agriculture is closely monitoring the impact of U.S. tariffs on the rubber industry and is prepared to implement strategies to mitigate adverse effects on farmers. The ministry's proactive approach aims to safeguard farmers' interests while ensuring compliance with international standards.
In another significant development, the U.S. has announced increased import tariffs on solar energy products from Southeast Asia, including Thailand. This decision, stemming from a year-long trade investigation, aims to address alleged unfair subsidies provided to solar energy manufacturers in the region.
The U.S. Department of Commerce has set tariffs as high as 3,521% for Cambodia, with Thailand facing a substantial tariff of 375.2%. This move has raised concerns among Thai manufacturers, as many of them are subsidiaries of Chinese firms that have relocated to Thailand to avoid tariffs.
According to Mr. Apichit Pasornrat, Vice President of the Federation of Thai Industries, the new tariffs will undoubtedly impact Thailand's solar panel production. "The U.S. knows that the majority of solar panels are produced by Chinese companies, and they are now targeting both China and its allies," he explained.
Despite these challenges, Thailand remains a significant exporter of solar panels to the U.S., accounting for 94.69% of the market share. In 2022, the export value of solar panels reached 46.24 billion baht, increasing to 111.96 billion baht in 2023. By early 2025, the export value stood at 7.65 billion baht.
As the Thai economy grapples with these multifaceted challenges, the government is focused on fostering cooperation between the public and private sectors to navigate the turbulent waters ahead. The emphasis on collaboration is seen as crucial to addressing the economic hurdles while ensuring the resilience of key industries.
In summary, Thailand's economic landscape is undergoing a significant transformation, driven by external pressures such as U.S. tariffs and global economic uncertainties. The government's proactive measures in key sectors like rubber and solar energy will be vital in mitigating the adverse effects and fostering sustainable growth in the coming years.
