Thailand Slashes Growth Forecast as Global Trade War Bites

Outlook for private investment and exports bleak while domestic consumption is weak

- 

Thailand has significantly lowered its forecast for economic growth this year as the global trade war undercuts private investment and exports, adding to already-weak consumption at home.

Gross domestic product (GDP) will likely grow 1.3 per cent to 2.3 per cent in 2025, taking into account additional stimulus measures the government is planning, the National Economic and Social Development Council (NESDC) said in Bangkok on May 19.

The latest forecast is a full percentage point lower than the previous estimate of 2.3 per cent to 3.3 per cent. The cut more or less aligns the agency's forecast with that of the Bank of Thailand, World Bank and International Monetary Fund.

If GDP growth comes in at the midpoint, it would be Thailand's weakest since the pandemic, according to Bloomberg-compiled data. It could take around two years for the economy to recover from the impact of a threatened 36 per cent US tariff and a global trade slowdown, NESDC chief Danucha Pichayanan said at a briefing.

"Economic growth remains constrained by high household and corporate debt burdens and it is expected the growth will be softened in the second half of the year, following the global economic and trade slowdown and the impact of trade protection measures," it said in a statement.