Economy Thai Economy Faces Challenges Amid Cabinet Speculation and US Tariff Concerns

[snoop1130]

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Thailand's economic outlook appears uncertain as unresolved US tariff negotiations continue to weigh heavily on forecasts, with the government likely to miss its targeted 3% growth this year. The situation took a worrying turn last week when Moody's Investors Service became the first global credit ratings agency to revise Thailand's outlook to negative, prompting calls for stronger action from the government, or even a cabinet reshuffle.

 

Industry leaders are divided on the issue. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, believes this is not the appropriate time for Prime Minister Paetongtarn Shinawatra to reshuffle her cabinet. He emphasises the need for continuity, particularly in economic ministries, as Thailand navigates intricate trade negotiations with the US following the imposition of a 36% tariff on Thai goods.

 

Kriengkrai stresses the importance of maintaining the current ministers to ensure negotiations proceed without interruption. Beyond trade policy, the economy faces high household debt levels, which have tightened bank lending, impacting sectors like the automotive industry.

 

The Office of Industrial Economics (OIE) attributes a recent uptick in the Manufacturing Production Index (MPI) to government measures, including a senior citizens' handout and a debt relief scheme, showcasing some resilience amid broader economic struggles.

 

Despite this, voices like Sanga Ruangwattanakul, president of the Khao San Road Business Association, argue that cabinet leadership needs revitalisation, particularly in tourism and economic stimulus areas. He points to missed opportunities in tourism restoration and dwindling foreign tourist numbers, especially from China, as pressing issues that require ministerial action beyond routine activities.

 

Financial strategist Poj Aramwattananont from the Thai Chamber of Commerce highlights the importance of knowledgeable leadership navigating global uncertainties, urging collaboration between the public and private sectors to address domestic challenges effectively.

 

Amid growing calls for proactive measures, business leaders like Thaniwan Kulmongkol from the Thai Restaurant Association call for more dialogue on pressing economic issues, particularly regarding agriculture prices and VAT proposals affecting small businesses.

 

From a market perspective, Mongkol Puangpetra of Daol Securities notes that investor sentiment remains focused on global factors like the US-China trade war rather than domestic politics. While Thai equities experienced a rally due to easing global tensions, the broader economic landscape remains vulnerable to external disruptions.

 

With Moody’s downgrade driven by fiscal sustainability concerns, experts caution that although recent market recoveries might offer temporary relief, sustained economic resilience will require strategic government action and effective crisis management amidst ongoing global trade dynamics.

 

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

 

 

[Jone500]

How hard can it be? Just go align with China Trump never cared about anyone anyway. America is heading back to being a banana republic. I'm sure if there's news that Thailand is strengthening ties with China and steps back from the U.S., the AN community on this forum would go absolutely nuts.🇨🇳🇨🇳🇨🇳