An independent academic warns that the anticipated economic policy under “Trump 2.0” is likely to be a major risk to Thailand’s economy in 2025.
Thailand is confronting five substantial challenges that could impede its economic growth this year. These include high household debt, investment and interest rate policies, Trumponomics 2.0, the slowdown of China’s economy, and geopolitical tensions.
According to Aat Pisanwanich, an expert in international economics and ASEAN affairs at Intelligence Research Consultant Co. Ltd., “Trumponomics 2.0 is projected to lower Thai GDP by 0.3-0.5%. This year, the Thai economy is expected to grow by 2.2-2.7%, which would indicate seven consecutive years of growth under 3%.”
The US tariffs associated with Trumponomics 2.0 are likely to decrease Thai exports to the US by 5-10%, leading to an overall 2% decline in exports. Thailand’s trade deficit with the US is forecasted to decrease to 27.5 billion baht this year, while imports from the US are expected to double.
Sectors most impacted by these US tariffs include electronics, auto parts, rubber products, apparel, plastics, fruits, seafood, rice, and beverages.
Mr. Aat highlighted the significance of China in both the global and Thai economies. The current sluggish growth in China’s economy diminishes the demand for goods and results in fewer Chinese tourists traveling abroad.
Additionally, China’s aim to sustain production levels to meet a 5% economic growth target could create further risks for its trading partners by flooding their markets with Chinese products, including those from Thailand.
He cautioned that if China’s growth falls below 5% in 2025, it could negatively impact Thai exports to China and limit the number of Chinese tourists visiting Thailand to around 7 million out of the expected 32-34 million foreign tourist arrivals.
This policy could result in a higher inflow of Chinese goods into Thailand, such as steel, electronics, machinery, consumer goods, and electrical appliances, pushing the trade deficit with China to a six-year high.
Thailand is projected to be the “sick man” of ASEAN with a projected GDP growth of 2.4%, placing it ninth among ASEAN member countries. In contrast, Vietnam and Cambodia are expected to lead the region with growth rates of 6.2%, according to Mr. Aat.
Exports from Thailand are estimated to grow by 1.5-2.2%, averaging around 1.9%, with total exports valued at approximately US$296-298 billion.
Mr. Aat indicated that multiple pressures in 2025 could lead to an increase in closures among small and medium enterprises, with some potentially being acquired by foreign investors.
Moreover, he remarked that the timing of implementing VAT collection is inappropriate given the current economic climate.
The country lacks major investment projects to drive economic growth, and budget allocations for populist measures do not effectively spur economic activity.
Unemployment is anticipated to rise due to the economic slowdown, business closures, and downsizing among Thai firms.
He concluded by stating, “The economy remains heavily dependent on external factors, such as foreign direct investment, exports, and tourism, which poses risks if any of these areas experience negative impacts.”
