BANGKOK: Thailand’s economy and exports will grow less than expected this year because of US tariffs, a leading business group said on Wednesday (May 7), adding the country could lose market share in the United States if a tariff reduction was not secured.
Southeast Asia’s second-largest economy was now expected to grow between 2.0 per cent and 2.2 per cent this year, down from a previous forecast of 2.4 per cent to 2.9 per cent growth, the Joint Standing Committee on Commerce, Industry and Banking said.
And exports, a key economic driver, were seen growing by between 0.3 per cent and 0.9 per cent this year, down from earlier projection of 1.5 per cent to 2.5 per cent growth, while expected tourist arrivals were cut to 36 million to 37 million, down from 39 million to 39.5 million.
Thailand is among the Southeast Asian nations hardest hit by US President Donald Trump’s trade policy, facing a 36 per cent tariff on shipments to its biggest export market if a reduction cannot be negotiated before July.
If the tariffs stand, the economy might grow by just 0.7 per cent this year, and lost export revenue over the next decade could be 1.4 trillion baht (US$43 billion), said Kriengkrai Theinnukul, chair of the Federation of Thai Industries, part of the group.
There was also a risk that other countries might negotiate better tariff terms and weaken Thai exports to the United States, Kriengkrai said.
The United States took more than 18 per cent of Thai exports last year, worth US$55 billion. Washington has put its trade deficit with Thailand at US$45.6 billion.
Kriengkrai said business was also worried about the strength of the baht, saying the government should make sure the currency does not appreciate too fast or become too volatile.
The finance ministry last week cut its forecast for economic growth this year to 2.1 per cent from 3 per cent due to the impact of US tariffs and a global slowdown.
Thailand’s economy has lagged regional peers since the pandemic, and the group said tariffs added to structural challenges such as high levels of household debt.
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