Thailand’s economic growth forecast for 2025 has been downgraded, with the Joint Standing Committee on Commerce, Industry, and Banking now predicting growth of just 1.5% to 2.0%, down from an earlier estimate of 2.0% to 2.2%. The revision comes amid concerns over the impact of US tariffs on Thai exports.
The export sector, a critical driver of the Thai economy, is expected to see minimal growth, with the latest forecast showing a potential decline of up to 0.5% or, at best, a rise of 0.3%. This marks a significant cut from the previous prediction of 0.3% to 0.9% growth. The second half of the year is expected to be particularly weak, with growth potentially falling below 1%, compared to 3% in the first half.
US Tariffs and Regional Competition
Thailand faces a potential 36% tariff on goods exported to the US if no deal is reached by July, a prospect causing growing concern among businesses. In contrast, neighboring Vietnam, which is engaged in active tariff negotiations with the US, could secure a more favorable deal, further complicating Thailand's competitiveness.
Kriangkrai Thianuku, chair of the Federation of Thai Industries, warned that if Vietnam receives a lower tariff rate, the impact on Thailand’s economy could be severe.
Rising Currency and Structural Pressures
In addition to the tariff threat, the appreciating Thai baht is raising concerns about Thailand’s price competitiveness in global markets. The country is also facing longer-term challenges, including an ageing population and high household debt, which are expected to slow economic growth.
With these combined pressures, the outlook for Thailand in the second half of 2025 remains uncertain.
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June 27, 2025
