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Trump 2.0's economic policy is anticipated to be the primary risk to the Thai economy in 2025, says an independent academic. Thailand faces five significant challenges this year that could hinder its economic growth.
These include household debt, policies on investment and interest rates, Trumponomics 2.0, China's economic slowdown and geopolitical tensions. "Trumponomics 2.
0 is expected to decrease Thai GDP by 0.3-0.5%.
This year, the Thai economy is projected to grow 2.2-2.7%, marking seven consecutive years of growth below 3%," said Aat Pisanwanich, an expert in international economics and Asean affairs and advisor at Intelligence Research Consultant Co Ltd.
The US tariffs implemented under Trumponomics 2.0 will likely reduce Thai exports to the US by 5-10%, causing an overall 2% decline in exports. Thailand's trade deficit with the US is expected to fall to 27.
5 billion baht this year, and imports from the US are expected to double. Sectors most affected by US tariffs include electronics, auto parts, rubber and rubber products, apparel, plastics, fruits, seafood, rice, and beverages. He emphasised the importance of China to the global economy and Thai economy.
China's ongoing sluggish rate of economic growth impacts the demand for goods and reduces the number of Chinese outbound tourists. Meanwhile, China's strategy of maintaining production levels to achieve a 5% economic growth target poses further risks to its trading partners as it leads to an influx of Chinese products into the markets of its trading partners including Thailand. Mr Aat cautioned that if China's economic growth is below 5% in 2025, it will affect Thailand's exports to China and reduce the number of Chinese tourists to no more than 7 million of the 32-34 million foreign tourist arrivals expected in Thailand.
The policy would lead to a further influx of Chinese products into Thailand including steel, electronics, machinery, consumer goods and electrical appliances. This will push Thailand's trade deficit with China to a six-year high. Thailand is expected to be the "sick man" of Asean with anticipated GDP growth of 2.
4%, ranking ninth among Asean member states. Vietnam and Cambodia are projected to lead the region with 6.2% growth, said Mr Aat.
The country's exports are estimated to grow 1.5-2.2%, averaging around 1.
9% with total exports valued at around US$296-298 billion. Mr Aat said multidirectional pressures in 2025 may lead to a rise in closures among small and medium enterprises with some possibly being taken over by foreign investors. Moreover, implementing VAT collection is considered untimely for the current state of the Thai economy.
The country lacks significant investment projects to stimulate economic growth, and the allocation of budget for populist measures fails to boost the economy effectively. Unemployment is expected to rise due to economic slowdown, company closures, and downsizing among Thai businesses. "The economy continues to rely heavily on external factors such as foreign direct investment, exports and tourism.
This reliance poses risks if any of these encounter negative impacts," he said..
