3 days Ago
Thai GDP is unlikely to reach the target of 3% growth this year because of US President Donald Trump's tariffs, says finance permanent secretary Lavaron Sangsnit. According to Mr Lavaron, the economic conflict between China and the US will inevitably affect the global economy, including Thailand. He said the Finance Ministry's forecast of 3% GDP growth this year appears difficult to achieve.
However, the ministry is committed to doing its utmost to bring GDP growth as close as possible to the 3% target, said Mr Lavaron. While some research houses have estimated Thai growth at 0.5% or 1% this year, he said it is too early to clearly assess the full impact, as there is still uncertainty surrounding the outcome of trade negotiations between Thailand and the US on import tariff rates and goods.
Regarding the negotiations, Mr Lavaron said while the US pointed to its trade deficit as the main trigger for tariffs, the nation is not focusing solely on economic or trade aspects in negotiations. In fact, the US is also considering other dimensions such as foreign policy and national security, he said. As a result, multiple ministries should be involved in negotiations, though the finance minister will continue to lead the negotiation team, said Mr Lavaron.
In terms of monetary policy, he said the Bank of Thailand's Monetary Policy Committee (MPC) has received new data to help guide its interest rate policy to cope with economic volatility. The MPC is expected to lower interest rates to support the economy, a move many other countries are considering, using interest rate policies as an additional tool, said Mr Lavaron. Regarding the government's proposal to borrow 500 billion baht to stimulate the economy, he said the figure is only a rough estimate.
"It is more important to first determine what projects the borrowing will fund, how much each project will require, what the current budget is, and how much more is needed. The borrowing would only cover a shortfall," said Mr Lavaron. As for concerns raised by the International Monetary Fund about a potential increase in Thailand's public debt if more borrowing occurs, he said the debt itself is not inherently a concern, as long as the borrowing serves a clear purpose and the country has the ability to repay it as scheduled.
In a related development, government spokesman Jirayu Houngsub said after the cabinet meeting on Tuesday Prime Minister Paetongtarn Shinawatra instructed ministries to enhance economic security within regional cooperation frameworks, especially Asean, given the uncertainty surrounding US tariff policy enforcement. This uncertainty has affected trade and exports for many countries. Leaders from several Asean countries such as Malaysia and Cambodia have discussed this issue and agree that member states should cooperate by leveraging their individual strengths to find the best overall outcome, said Ms Paetongtarn.
This method would allow negotiations to benefit all Asean members, she said. These strengths could include natural resources, transport network connectivity, and the potential of human resources, said Ms Paetongtarn. The prime minister instructed the Foreign Affairs, Commerce and Finance ministries, as well as the working group on US trade policies, to listen to opinions from all sectors and compile measures that could represent Asean's collective strengths.
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