Economy Thailand Lowers Economic Growth Forecast Amid Global Challenges

[snoop1130]

Photo courtesy of DHL

 

The Ministry of Finance has revised its economic growth projection for Thailand to 2.1% for this year, down from the previous estimate of 3%. This adjustment reflects the impact of US tariffs and a global economic slowdown affecting Southeast Asia’s second-largest economy.

 

According to Pornchai Thiraveja, director-general of the Fiscal Policy Office, GDP growth could reach 2.5% if the US imposes only a 10% tariff on Thai imports rather than the initially proposed 36%. The revised expectation for exports, a crucial economic driver, now stands at a 2.3% increase, down from an earlier prediction of 4.4%.

 

This forecast update comes alongside the Bank of Thailand's recent decision to cut interest rates for the second consecutive meeting. The central bank now anticipates the economy could grow by as little as 1.3% if US tariffs significantly affect Thailand.

 

Tourism, another key economic contributor, sees its forecast for foreign arrivals reduced to 36.5 million, down from 38.5 million, still representing a 2.7% increase from last year.

 

Given the uncertain economic outlook, the government is urged to expedite the disbursement of the 2025 fiscal budget to bolster economic activity. The goal is a 94.4% disbursement rate this year, with projections for current expenditure at 101% and capital investments at 74.8%.

 

Despite challenges, there's a silver lining in the postponed imposition of US tariffs until July and exemptions for specific items like electronics and computers, which provide some relief for Thai exports.

 

Domestically, consumer confidence remains solid, with private consumption predicted to grow by 3.2% due to increased purchasing power and a tourism rebound. Private investment is expected to rise by 0.4%, while government consumption is forecast to increase by 1.2% and public investment by 2.8%, bolstered by ongoing infrastructure projects.

 

These measures highlight Thailand's efforts to navigate economic uncertainties, balancing the challenges posed by external factors with robust domestic consumption and strategic public investment.

 

  Adapted by ASEAN Now from The Thaiger 2025-05-02

 

 

[Will B Good]

8 minutes ago, snoop1130 said:

These measures highlight Thailand's efforts to navigate economic uncertainties, balancing the challenges posed by external factors with robust domestic consumption and strategic public investment

 

"These measures".......disbursement of the budget? Or did I miss something?