BANGKOK, July 9 (TNA) – The Bank of Thailand (BOT) warns that potential U.S. tariffs could suppress Thai economic growth into early 2026, with current forecasts pointing to export contractions of 4% in the second half of 2025 and 2% in 2026.
However, BOT Assistant Governor Sakkapob Panyanukul emphasized that while financial markets have largely anticipated the U.S.’s proposed 36% retaliatory tariff (effective August 1, 2025), close monitoring and ongoing negotiations remain crucial as the situation develops. He noted that despite H1 2025 growth, these potential U.S. tariffs, combined with slower tourism, pose significant risks to exports, investment, and consumption.
Monetary policy will remain accommodative to support the economy, with the MPC ready to adjust as risks intensify. The BOT and the Office of the National Economic and Social Development Council (NESDC) are urging government action to aid SMEs affected by increased foreign imports, focusing on import standards and anti-dumping. Domestic political factors could also delay budget disbursement, affecting private investment.
Deputy Governor Piti Disyatat reaffirmed that regardless of the final tariff rate, Thai economic growth will slow in H2 2025, leading to a revised 2026 GDP growth forecast of 1.7%, below potential.
Low inflation is primarily due to falling energy and fresh food prices, not weak demand. The baht’s movements align with regional trends, and the BOT will continue to monitor it closely, ensuring current interest rates remain supportive of recovery. -819 (TNA)
