NESDC slashes growth forecast

Downgrades outlook to 1.8% from 2.8%

- WICHIT CHANTANUSORNSIRI NAREERAT WIRIYAPONG

The state planning unit has slashed its economic growth forecast for this year to 1.8%, down from its earlier projection of 2.8% due to the impact of the global trade war.

The latest revised growth figure already includes the effect of government stimulus measures totalling over 200 billion baht that have been injected into the economy.

Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), said yesterday that the economy this year is directly affected by US President Donald Trump's reciprocal tariffs policy.

The NESDC has modelled three global economic scenarios: base case, high case and low case.

For the base case, the US imposes a 54% tariff on Chinese imports, and China retaliates with a 34% tariff on US goods.

In this case, global economic growth would be 2.6%, and Thailand's economy would grow by 1.8%. This scenario is the basis for the NESDC's current forecast.

In the high case, the US and China significantly reduce tariffs, with the US imposing 30% and China 10%. This would result in 2.8% global growth and 2.2% growth for Thailand.

In the low case, the US sets tariffs at 145% on Chinese goods, and China imposes 146% on US goods. Global economic growth would fall to 2.2%, and Thailand's growth would slump to 0.5%.

Despite these pressures, Mr Danucha noted that the Thai economy in the first quarter of 2025 expanded by 3.1% year-on-year, continuing from 3.3% in the previous quarter.

After seasonal adjustment, the economy increased by 0.7% from the fourth quarter of 2024.

Exports of goods and services in this year's first quarter grew by 12.3%, up from 11.5% in the previous quarter. This was due to countries rushing to import goods ahead of the US tariffs.