Thai economic growth to see hit from US tariffs, central bank says

[BANGKOK] Thailand’s economic growth will be hit by US tariffs on its exports, although the impact on activity won’t be as great as during the Covid-19 pandemic, a senior central bank official said on Thursday (Apr 17).

The US tariffs have halted some production and delayed investment decisions, and their effect on Thailand’s exports will be seen in the second half of the year, Bank of Thailand assistant governor Sakkapop Panyanukul told a briefing.

“Global trade policy uncertainty is a large and prolonged shock that will affect Thailand in many ways”, he said.

Thailand is among South-east Asian nations hardest hit by US President Donald Trump’s proposed measures, facing a 36 per cent tariff if a reduction can’t be negotiated before a global moratorium expires in July.

The economy is now likely to grow less than 2.5 per cent this year, below a previous forecast, in part because higher US imports to reduce Thailand’s trade surplus with America will affect local manufacturing, Sakkapop said.

“GDP will definitely decrease,” he said, but added that how much was still uncertain.

“The impact will not be small but it will not be as severe as during Covid,” he said.

Because of a strong start to 2025, full-year export growth may not be too badly affected overall, Sakkapop said.

Inflation is likely to fall, driven by supply-side factors, but there is no pressure on monetary policy, he said.

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In February, the central bank cut the key interest rate by 25 basis points to 2.00 per cent, a move it said was a response to a weaker growth outlook and increased risks posed by global trade policy uncertainty.

Its next rate meeting is on April 30, when it is due to give updated economic forecasts. REUTERS