BANGKOK :Thailand’s economy is expected to grow 1.8 per cent to 2.2 per cent this year, higher than a previous forecast of 1.5 per cent to 2.0 per cent, after the United States lowered its tariff rate to 19 per cent on imported goods from the country, a leading business group said on Wednesday.
The new tariff set last week is significantly lower than the 36 per cent level announced earlier this year and more aligned with other countries in the region.
The United States was Thailand’s largest export market last year, accounting for 18.3 per cent of total shipments, with a value of $54.96 billion.
Exports, a key driver of Thai growth, are now expected to rise between 2 per cent and 3 per cent this year, up from a previous forecast ranging between a 0.5 per cent drop and a rise of 0.3 per cent, the Joint Standing Committee on Commerce, Industry and Banking said.
The reduced tariff helps Southeast Asia’s second-largest economy remains competitive compared with neighbouring countries, it said.
One remaining issue relates to U.S. tariffs on transshipments via Thailand from third countries, said Kriengkrai Theinnukul, chairman of the Federation of Thai Industries.
“The next talks (with the United States) will focus on how much local content each industry must have,” he told reporters.
The economy is likely to slow down in the second half of the year due to weaker exports, increased price competition, a strong baht currency and declining U.S. consumer purchasing power, the business group said.
Weaker tourism and a Thai-Cambodian border conflict may further impact the economy, it said.
Last month, the finance ministry also raised its 2025 economic growth forecast to 2.2 per cent from 2.1 per cent, after last year’s 2.5 per cent expansion lagged peers.
