Bangkok (VNA) - Thailand may face five significant challenges that could hinder its economic growth this year, according to Aat Pisanwanich, an expert in international economics and ASEAN affairs and advisor at Intelligence Research Consultant Co Ltd.
These include household debt, policies on investment and interest rates, Trumponomics 2.0, China's economic slowdown, and geopolitical tensions.
According to the economist, Trumponomics 2.0 is expected to decrease Thailand’s GDP by 0.3-0.5%. This year, the Thai economy is projected to grow 2.2-2.7%, marking seven consecutive years of growth below 3%
The US tariffs implemented under Trumponomics 2.0 will likely reduce Thai exports to the US by 5-10%, causing an overall 2% decline in exports, he said, adding that the country's trade deficit with the US is expected to fall to 27.5 billion THB (802.2 million USD) this year, and imports from the US are expected to double.
Aat also emphasised the importance of China to the global economy and Thai economy. China's ongoing sluggish rate of economic growth impacts the demand for goods and reduces the number of Chinese outbound tourists.
Meanwhile, China's strategy of maintaining production levels to achieve a 5% economic growth target poses further risks to its trading partners as it leads to an influx of Chinese products into the markets of its trading partners including Thailand.
The expert cautioned that if China's economic growth is below 5% in 2025, it will affect Thailand's exports to China and reduce the number of Chinese tourists to no more than 7 million of the 32-34 million foreign tourist arrivals expected in Thailand.
He added that multidirectional pressures in 2025 may lead to a rise in closures among small- and medium-sized enterprises with some possibly being taken over by foreign investors.
Moreover, implementing VAT collection is considered untimely for the current state of the Thai economy.
The country lacks significant investment projects to stimulate economic growth, and the allocation of budget for populist measures fails to boost the economy effectively. In addition, unemployment is expected to rise due to economic slowdown, company closures, and downsizing among Thai businesses, he stated./.
