Thai GDP might expand at a slower pace in 2025 than the projected growth of 2.6% this year, as the policies of US President-elect Donald Trump could put pressure on exports, which have rebounded significantly to become a major growth driver of the economy.
While most forecasters predict economic growth will rise in 2025, Kasikorn Securities anticipates that the country's GDP growth might fall to 2.4% because of emerging risks from policy uncertainties in the US, its trade war with China, and more intense competition from Chinese goods shipped to other markets.
Kasikorn Bank's in-house view is that Thailand's GDP growth will reach 2.6% in 2024, as exports have rebounded over recent months to support economic growth along with domestic demand and the recovery in tourism, said Ratasak Piriyanont, senior vice-president of macro strategies at Kasikorn Securities.
The Commerce Ministry said on Dec 19 that exports are on course to achieve a historic high of US$300 billion this year, up 5.2% from 2023. In November, the value of shipments reached $25.6 billion, marking the fifth consecutive month of growth with an 8.2% year-on-year increase.
"The country's GDP will continue to grow in 2025 but slower than this year's 2.6% as the Trump effect might put Thai exports at risk," he noted.
Kavee Chukitkasem, head of research and content at Pi Securities, shared a similar view, saying exports might decline next year.
"The tourism sector will continue to expand but at a slower pace [than 2024]. As a result, slower economic growth next year is possible," he said.
Meanwhile, Maybank Securities (Thailand) sees limited risk that Thailand will become one of the main targets of additional tariffs given its relatively low net trade imbalance with the US in absolute terms.
"Compared to some of its Asian peers, Thailand looks to be relatively safe from potential additional tariffs. This is because Thailand was only ranked 12th overall in terms of the US trade deficit in 2023," said head of research Chak Reungsinpinya.
While the US trade deficit with Thailand has increased over the years, it has done so mostly in line with other Asean peers, with the notable exception of Vietnam, he added.
According to Maybank, the US trade deficit with Thailand has grown by about 181% cumulatively over the past 15 years. This is higher than Indonesia's 67% and Malaysia's 51%. However, it pales in comparison with Vietnam, which has seen its trade imbalance with the US ballooning by nearly 10 times over the same period.
"Even on a relative basis, we do not think Thailand stands out as a potential target for additional tariffs. The US trade deficit with Thailand compared to the size of Thailand's GDP is only 8%. This is in line with Malaysia's 7% and is much lower than Vietnam's 24%," Mr Chak said.
