Council warns of tariff impact on GDP growth

NESDC revises down 2026 growth outlook

- WICHIT CHANTANUSORNSIRI NAREERAT WIRIYAPONG

The Thai economy must brace for the impact of the US's reciprocal tariff policy, according to the National Economic and Social Development Council (NESDC), which projects next year’s GDP growth will slow to 1.7%, down from an estimated 2% this year.

According to NESDC secretary-general Onfa Vejjajiva, the NESDC is maintaining its forecast for economic growth this year at 2%, unchanged from the projection it made on Aug 18.

She noted that a key assumption underlying the NESDC’s economic forecast is global trade volume, which had earlier been expected to shrink sharply.

The NESDC projected on Aug 18 that global trade would expand by only 2.7%, but its latest forecast has revised the rate up to 3.4%, supporting global economic growth of 3.2%, compared with an earlier estimate of 3%.

For 2026, the NESDC expects Thailand's economic growth to be lower than this year, largely due to the effects of America’s tariff measures, which are expected to weigh on global trade volume. Global trade is projected to expand only 2.3% in 2026, while global GDP is projected to grow 2.8%.

In addition to the impact of the US tariffs, Thailand also faces challenges from high levels of private sector debt, volatility in the global economic and financial system, and uncertainties surrounding the domestic economic and political environment before and after the upcoming election.

She added that many Thai exports to the US fall under Section 232 of the US Trade Expansion Act of 1962, making them potentially subject to special US tariffs. As much as 82% of Thailand's exports to the US fall under this section — higher than both Indonesia and Vietnam.