Thai economy to slow in second half of 2025, central bank says
Thai exports, a key driver of the economy, were expected to contract 4 per cent on a yearly basis in the second half of the year as a result of the tariffs imposed by the United States, the Bank of Thailand said.
The United States was Thailand's largest export market last year, accounting for 18.3 per cent of total shipments and reaching a value of $55 billion. Washington says its trade deficit with Thailand hit $45.6 billion in 2024.
Southeast Asia's second-largest economy faces tariffs of 36 per cent from Washington if a deal cannot be reached before August 1.
The economy is growing below its potential, and is forecast to expand 2.3 per cent this year and 1.7 per cent in 2026, Deputy Governor Piti Disyatat said, adding that those forecasts had already factored in the headwinds.
In the first five months of 2025, exports rose 14.9 per cent from a year earlier, commerce ministry data showed, as companies rushed to deliver their products before a 90-day tariff pause came to an end. That pause has now been extended to August.
The central bank forecast exports to rise 4 per cent this year but drop 2 per cent next year.
Thai economic growth and financial conditions were held back by several factors and monetary policy alone had limited efficacy when addressing those issues, minutes from the Bank of Thailand's June 25 monetary policy meeting showed on Wednesday.
At the meeting, the BOT's monetary policy committee voted 6 to 1 to keep the one-day repurchase rate unchanged at 1.75 per cent, after back-to-back cuts in February and April.
"Targeted measures in conjunction with business adaptation were deemed necessary," it said.
At the review, the stronger-than-expected start to the year saw the BOT lift its central-case economic growth forecast to 2.3 per cent for 2025, almost matching last year's 2.5 per cent and more optimistic than some market analysts.
The next rate review is on August 13.
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