Economy Thailand Braces for Economic Turbulence Amid Global Instability

[snoop1130]

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Thailand is preparing for six months of economic "turbulence," as Deputy Prime Minister and Finance Minister Pichai Chunhavajira announced, due to a volatile global economic climate. The turbulence is largely attributed to shifts in international trade dynamics, particularly influenced by US President Donald Trump's tariff policies which have had widespread effects.

 

Pichai highlighted the necessity for proactive government measures to mitigate the downturn’s impacts. While confident that global economies will eventually stabilize, he stressed the importance of short-term strategies to counter anticipated economic challenges.

 

Thailand, currently enjoying a trade surplus with the US, aims to rebalance its trade relations by importing more US goods, especially agricultural products like maize and fish for animal feed processing. The country is also considering increasing imports of US energy products, contingent upon competitive pricing.

 

Domestically, the Thai government plans to attract foreign investment with a focus on high-tech sectors that complement local supply chains. This approach involves more selective criteria for investment opportunities, ensuring alignment with national interests.

 

In the public sector, attention will be directed towards critical infrastructural projects, including flood and drought management. Moreover, the proposal for an entertainment complex that would legalize casinos remains under consideration as a potential revenue boost.

 

Despite external pressures, Mr Pichai expressed optimism, noting that if major disruptions are avoided, Thailand's GDP could still achieve a growth rate exceeding 3% this year. First-quarter GDP growth expectations were initially 2.5% to 3%, but the global economic conditions may influence further changes by the third quarter.

 

To address potential economic instability, contingency plans are being put in place, and the prioritization of urgent government investments is emphasized. A key initiative is the expansion of the "Khun Su, Rao Chuay" debt relief programme, which proposes raising the debt forgiveness threshold, offering relief for debtors who pay off a portion of their debts.

 

In response to recent adjustments, the Bank of Thailand’s policy interest rate reduction by 0.25% aims to stimulate investment. Meanwhile, the Fiscal Police Office has adjusted the GDP growth forecast for 2025 to 2.1%, reflecting the projected impacts of tariff policies. However, a potential reduction in tariffs might improve growth prospects to 2.5%.

 

To navigate these challenges, expedited disbursement of the 2025 fiscal budget is crucial, with targeted disbursement rates for current expenditures and capital investments highlighted by FPO director-general Pornchai Thiraveja, ensuring the government is well-prepared to manage the economic landscape ahead.

 

  Adapted by ASEAN Now from Bangkok Post 2025-05-02

 

 

[CallumWK]

Yeah sure, baht got 1.3  % stronger against all major currencies today

[ikke1959]

Conservatism and protectionism are main reasons that Thailand will go back together with the manipulation of the expensive Thai Baht... Thailand is killing itself