11 July 2024

The current growth forecast for Thailand’s GDP is 3.8%, with exports projected to grow by 3%, but global economic volatility, caused by the intensifying trade war between China and the United States, may necessitate a review by The Bank of Thailand next month. 

 

BoT Governor Veerathai Santipraphob admitted Thursday that Thailand’s economic growth is likely to be below current projections.

He added that domestic political uncertainty is also a factor, which will affect decision making on new investments in Thailand.

 

Thai exports will definitely be affected by the escalating US-China trade war, but to what degree depends on the business sector, said Mr. Veerathai. For example, exports of vehicle parts to the US will benefit from the increased tariffs imposed on Chinese spare parts.

 

Export of the same products to China for re-export to US market, on the other hand, will be hard hit.

He said that the central bank will closely monitor the situation and suggested that Thai exporters make adjustments by exploring new markets as authorities try to forge trade agreements with other countries in the region.

 

Regarding the Thai currency, the governor said the value of the baht remains volatile, partly due to the policy directions of the major industrial economies, which have an impact on global stock markets, foreign exchanges and value of assets.

He maintained that forex risk management is still necessary for business operators.

 

Mr. Veerathai confirmed that Thailand has not been put on the US’s currency special watch list, saying that Thailand has been consulting with the US. He also said that the BoT has never intervened in the Thai currency to support Thai exports.