What To Know
- This Bangkok Business News report highlights that unless a meaningful breakthrough in trade negotiations is reached, Thailand could find itself struggling to maintain competitiveness in the US market.
- At the negotiation table, the Thai government is under pressure to offer market access concessions, particularly in the agricultural sector.
Bangkok Business News: Growth Projections Hold for Now But Storm Clouds Loom
Thailand’s economy is projected to grow by 1.5% in 2025, according to the latest outlook by the Economic Intelligence Centre (EIC) of Siam Commercial Bank. While this aligns with earlier estimates, the resilience is only temporary and largely attributed to a strategic front-loading of exports. Thai businesses have been rushing shipments ahead of a looming August 1, 2025 deadline that could see crippling retaliatory tariffs imposed by the United States.
The Thai economy is headed for tough times
Image Credit: Al- Generated
However, the second half of 2025 may bring a different story. This Bangkok Business News report highlights that unless a meaningful breakthrough in trade negotiations is reached, Thailand could find itself struggling to maintain competitiveness in the US market. Even a partial reduction in tariffs would still leave Thai products more expensive than those from countries like Vietnam, South Korea, and Japan—major rivals with more favorable trade arrangements.
2026 Could See Economic Groundfall
Looking ahead, the EIC forecasts a significant deceleration in Thailand’s economic momentum. GDP growth is expected to slow to 1.2% in 2026. If trade barriers remain intact or worsen, that figure could nosedive to a mere 0.4%, driven by a severe drop in exports and a sharp pullback in private sector investment. Key export sectors—especially electronics and electrical appliances—face mounting pressure as foreign buyers turn to suppliers from nations enjoying lower US retaliatory tariffs.
Thai exporters are also bracing for stricter enforcement of US rules of origin and a possible surge in transshipment-related penalties, similar to those recently aimed at Vietnam. These developments could significantly increase operational costs for Thai firms, particularly those that rely heavily on imported components for finished products.
Agricultural Sector in the Crosshairs
At the negotiation table, the Thai government is under pressure to offer market access concessions, particularly in the agricultural sector. But the stakes are high. Local industries such as pork, poultry, and maize could suffer immensely if the country opens its doors to cheaper US agricultural imports.
According to the EIC, Thai farmers are already operating with higher production costs than their American counterparts. Increased imports would not only disrupt domestic supply chains but also place immense strain on smallholder farmers, who are ill-equipped to compete. If liberalization goes ahead, it will require a robust government support framework to shield local stakeholders and help them transition to the new market realities.
Without a solid trade resolution, the economic fallout could be severe, reverberating far beyond the export sector. Investor confidence, employment, and overall GDP growth may all take a substantial hit. The government’s window to act is shrinking rapidly, and the choices made in the coming months could determine whether Thailand weathers the storm—or sinks into stagnation.
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