Citi Thailand expects US tariff hikes to have a limited impact on exports, as Thailand is not the main target of American taxation policies.
Thailand may be indirectly affected by US tariffs under the Donald Trump administration, said Nalin Chutchotitham, an economist at Citibank Thailand.
"The US tariff policy is unlikely to significantly impact Thailand's exports, as the country is not a strategic target for US tariff increases," she said.
"However, potential US tariff increases on China warrant monitoring. Given the trade linkages between Thailand and China, US tariffs on China could indirectly affect Thailand's exports."
US policies are also expected to heighten global economic uncertainties, which could pressure trade and dampen import demand from Thailand's trade partners. Citi expects Thai exports in US dollar terms to grow at a slower pace of 2.8% in 2025, down from 4.6% in 2024.
On a positive note, the bank expects improved Thai GDP growth, forecasting 3.2% in 2025, up from 2.7% in 2024. The economic rebound is expected to be supported by domestic investment.
Private investment is projected to accelerate, driven by Board of Investment-approved projects, particularly in electric vehicles, data centres, and food processing industries.
Ms Nalin said tourism will remain a key driver of Thai economic growth this year. Citi expects 39.8 million foreign tourist arrivals in 2025, with spending per visitor rising slightly to US$1,298.
Tourism income is expected to represent 9.3% of GDP.
Citi expects the Bank of Thailand to keep its policy rate at 2.25% throughout this year. However, if economic growth and inflation are softer than the central bank's assessments, the regulator may consider a single rate cut of 25 basis points in the first half of the year.
Johanna Chua, head of emerging market economics and chief Asia economist at Citigroup, said the bank expects the US to increase tariffs on China to an average of 15%, lower than the market expectation of 60%, thanks to ongoing negotiations.
"The tariff is a negotiating tool for the US with strategically targeted countries," said Ms Chua.
Citi forecasts economic growth in Asia slowing to 4.3% this year, from 4.8% in 2024, primarily due to China's economic slump. Growth in China is expected to decline to 4.2% in 2025, from 5% last year.