The Bank of Thailand released a media briefing setting out a preliminary assessment of how current United States trade policies and responses from major economies could affect Thailand. It expects the prolonged uncertainty to pressure the Thai economy through multiple channels, with near-term effects showing up as greater financial-market volatility and weaker production, trade and investment, while the tariff impact on exports is expected to become clearer in the second half of the year. The assessment highlights five transmission channels. Financial markets have become more volatile, but liquidity and market functioning remain normal; the baht was modestly stronger against the US dollar than before 2 April, equities have fallen broadly in line with the region, and government bond yields have edged up, with no unusual institutional-investor flows and normal corporate bond issuance, although tariff-exposed firms’ financial conditions warrant monitoring. Uncertainty is delaying investment decisions, especially in export-to-US industries such as electronics, electrical appliances, machinery and automotive, with potential relocation risk if Thailand faces higher tariffs than peers. Export exposure to the United States is estimated at 18% of total exports and 2.2% of GDP, with additional supply-chain exposure linked to US demand of about 4.3% of exports; processed foods could see temporary front-loading while reciprocal tariffs are delayed. The briefing also points to increased competition from redirected exports into Thailand and its trading partners, and to a global slowdown that could weigh on exports and tourism while lowering commodity prices and, through supply-side effects, inflation. The central bank said it will closely monitor real-time indicators covering trade flows, production and employment (including temporary closures under Section 75 of the Labor Protection Act), financial conditions (including default risks and corporate bond borrowing costs) and investment sentiment (including investment promotion applications and extension requests). It also indicated it will maintain market functioning and manage higher-than-usual volatility, and outlined broader near-term and long-term adaptation measures for Thailand, including steps to address import competition and transshipment risks and to diversify export markets and strengthen competitiveness.
Bank of Thailand 2025-04-17
Bank of Thailand publishes preliminary analysis of how US-led trade policy uncertainty could pressure the Thai economy
The Bank of Thailand's preliminary assessment suggests U.S. trade policies and global responses may pressure Thailand's economy, causing financial-market volatility and weaker production, trade, and investment. The central bank highlights potential export impacts, especially to the U.S., and emphasizes monitoring financial conditions and investment sentiment. It plans to maintain market stability and implement measures to address import competition, transshipment risks, and diversify export markets.