Economists cut Thai, Malaysian growth forecasts on trade turmoil
The surveys underscore the extent to which South-east Asia is being hit by both levies on exports to the US and the broader slowdown in global trade
ECONOMISTS have slashed forecasts for growth in Malaysia and Thailand as the export-dependent economies grapple with US President Donald Trump’s global trade war.
Thailand’s gross domestic product is set to expand by 2.1 per cent in 2025, according to the median prediction of 27 economists Bloomberg surveyed in May. That’s lower than the 2.8 per cent expected in a February survey, and below last year’s 2.5 per cent growth.
“We see the economy would slow down over the next few quarters since the negative impact of trade war would kick in,” Krung Thai Bank’s first vice-president Chamadanai Marknual said.
Foreign tourists arrivals are also likely to be lower than anticipated, and there will be limited room for additional fiscal stimulus, he said.
Malaysia’s 2025 GDP is seen expanding just 4.1 per cent, according to the median estimate of 28 economists polled. That’s down from a February forecast of 4.7 per cent and a full percentage point slower than last year’s expansion of 5.1 per cent. Second-quarter growth is expected to come in at 4.2 per cent, from a prior forecast of 4.5 per cent.
“Malaysia’s economic growth is set to moderate further over the course of 2025,” Han Teng Chua, senior economist at DBS Bank, said, adding that exports will face headwinds from heightened global trade tensions.
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The surveys underscore the extent to which South-east Asia, one of the world’s fastest-growing regions, is being hit by both levies on exports to the US and the broader slowdown in global trade.
In Malaysia, domestic demand will remain resilient due to supportive household spending and sustained investment expansion, Chua said.
Inflation is contained, likely providing room for Bank Negara Malaysia to loosen monetary policy in the second half of this year, the economist said.
Malaysia’s central bank said earlier this month that it has policy room to act, as it expects growth to fall below the official forecast this year.
The Thai economy will probably post growth of 2.4 per cent in the second quarter from a year earlier, down from the previous forecast of a 2.8 per cent expansion.
Earlier this month, Thailand’s National Economic and Social Development Council said GDP will likely expand in a range of 1.3 to 2.3 per cent in 2025, with growth constrained by high household and corporate debt burdens. BLOOMBERG
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