Trade-reliant Thailand better get used to worrying about the export outlook if President Donald Trump wins a second term, according to an official who helps to decide the country’s policy interest rate.
“The US-China trade war has haunted us,” Somchai Jitsuchon, a member of the Bank of Thailand’s monetary policy committee, said in an interview. “And that may continue for a long while, especially if Trump gets voted in again.”
Growth in Southeast Asia’s second-largest economy slumped to a four-year low last quarter, in part as exports tumbled. Thailand’s shipments of items such as automotive and electrical parts feed into China’s supply chain, exposing it to the fallout from the tension between the world’s two largest economies.
The Bank of Thailand has left its key rate unchanged since a hike in December to 1.75%, the first increase since 2011. It has said that policy will be guided by future economic reports amid heightened uncertainty.
Mr Somchai reiterated that position, saying the monetary policy panel is “open to all possibilities and data dependent.” It’s also concerned about financial stability, he said.
Moderating tourism is another of the challenges facing the Thai economy, Mr Somchai said. Domestic demand is providing some momentum but would fizzle eventually if the overall slowdown drags on, he said.
The investment outlook is better, with the new government expected to continue the $54 billion development plan for the eastern seaboard, Mr Somchai said. More firms may pick Thailand for a manufacturing base to skirt US tariffs on China, he said.
Mr Somchai is one of seven members of the monetary policy committee and is also a research director at the Thailand Development Research Institute. The next central bank policy decision is due on June 26.