BoT warns of long path to recovery

Trade war will hurt Thailand until 2026

- SOMRUEDI BANCHONGDUANG

Structural problems are a key concern undermining Thailand's future growth potential, Bank of Thailand governor Sethaput Suthiwartnarueput has warned in a harrowing forecast of the country's economic future.

Mr Sethaput, scheduled to complete his term on Sept 30 this year, outlined Thailand's economic outlook in four phases, describing it as a V-shaped trajectory influenced by US tariffs on Thai exports.

The first phase is marked by heightened uncertainty, followed by a decline and bottoming out, then a recovery, with the fourth phase referred to as the after shock period. This final stage is when the structural problems must be addressed, Mr Sethaput said.

The structural problems include slow economic growth, limitations in manufacturing and tourism, competition from imported goods, heavy reliance on exports, debt issues, and declining quality of assets.

"It will take longer to reach the recovery phase, resulting in a wider gap between the downturn and the upturn sides of the V-shape than in a typical recovery," he said.

Mr Sethaput said the gap will likely be prolonged because the trade negotiations between the US and other countries will take time, particularly with China.