Coping with a sluggish outlook

Business leaders are preparing for limited growth or even a recession as they await negotiations over US tariffs, write Post reporters

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As several countries seek trade negotiations with the US during the 90-day pause on tariffs, Thailand's slow progress has sparked concerns over potential economic repercussions.

Fears of a recession have resurfaced, especially as the other economic engine of tourism faces a tough test with purchasing power dipping in the Chinese market.

ALMOST HOPELESS

New measures to lift the Thai economy during a recession may be limited, and the downturn could start as early as the second quarter this year, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).

Many countries are likely to face a recession if US President Donald Trump's tariffs are implemented, and Thailand has few cures for its economic ills, he said, meaning Thai GDP could grow slowly this year.

"I rarely see new economic tools boost the economy," said Mr Kriengkrai.

An earlier proposal for Thailand to seek new markets is a good concept if exports to the US drop as a result of new tariffs, but other countries will be competing with Thailand in these new markets if the tariffs affect them, he said.

Many countries have cost advantages over Thailand in terms of production, electricity and labour, said Mr Kriengkrai. It is not easy for Thailand to drive up GDP by relying mainly on exports to new markets, he said.

"Don't forget China was among the first countries to seek new markets when former US president Joe Biden passed trade sanctions on certain Chinese products," said Mr Kriengkrai.

"Chinese companies exported more products to Southeast Asia after their shipments to the US declined. China continues to have a trade surplus with Asean."

The Southeast Asian market, with a population of roughly 700 million, has become a main target for exporting countries. Thailand also wants to focus on this region, but has key rivals such as Vietnam also affected by steep Trump tariffs.