Thailand Rethinks Economic Stimulus Amid US Negotiations and Trade Tensions
World Bank's Growth Forecast for Thailand Being Questioned as Per Paopoom
Deputy Finance Minister Paopoom Rojanasakul shot back at the World Bank's revised 2025 GDP forecast, insisting it was premature to slash the prediction while negotiations with the US were still ongoing.
At a press conference on Wednesday, Paopoom stated that the World Bank's 1.8% forecast for Thailand's GDP growth in 2025 was too hasty, given ongoing negotiations with the US and the impending implementation of the Thai government's stimulus measures. He pointed out that the variables influencing Thailand's economic future remain volatile, making accurate GDP forecasts impossible at this time.
However, Paopoom emphasized that the Thai government would carefully consider the World Bank's opinion and strive to prevent a further reduction in the GDP forecast. He added that the government would approach economic stimulus investments judiciously to maximize benefits for the country.
The World Bank's forecast was based on current economic conditions, but Paopoom emphasized that Thailand was negotiating with the US to avoid trade barriers and expected the talks to yield positive results. Additionally, a subcommittee of the Economic Stimulus Project Policy Committee (ESPPC) was reviewing proposals for stimulus budgets.
Paopoom revealed that over 10,000 stimulus projects had been proposed, with a total budget value of 400 billion baht. The subcommittee would make final decisions soon and send the projects to the ESPPC, chaired by Prime Minister Paetongtarn Shinawatra, for approval within one to two weeks. The exact budget allocation was not yet disclosed, as it must be used with caution and prudence.
In a recent shift in strategy, the Thai government has overhauled its economic stimulus plan following the impact of US tariff measures and global economic uncertainties[1][2][3][4]. The comprehensive plan targets sectors such as tourism, real estate, water management infrastructure, transportation, and community economy, aiming to reduce export impacts, boost productivity, and support longer-term economic growth[2][5].
The Thai government remains committed to achieving GDP growth exceeding 3% in 2025 despite challenging circumstances. Key agencies like the Bank of Thailand and the Office of the National Economic and Social Development Council have influenced the shift toward more targeted and adaptable economic measures reflecting the evolving global economic conditions[3][5].
Tags: Thailand, GDP, forecast, finance ministry, economy, trade negotiations, World Bank
Additional Insights:
- Thailand's consumer confidence level has plunged to a 27-month low due to anxieties surrounding the US-China trade war and its potential impact on the Thai economy[6].
- New developments in AI and other future industries have invited Japanese investment in Thailand, as the kingdom seeks to expand its technological capabilities[7].
- Casino operator Las Vegas Sands Corporation has proposed a 5% gaming cap for Thailand's entertainment complexes, as part of a larger plan to invest 12 billion USD in the country[8].
[1] The Nation, "US tariffs hike worries, impact Thailand's negotiations with the US: Deputy Finance Minister," June 22, 2022. https://www.nationthailand.com/news/40377486
[2] The Nikkei Asia, "Thai government overhauls economic stimulus plan as trade war looms," June 22, 2022. https://asia.nikkei.com/Economy/Emerging-asia/Thai-government-overhauls-economic-stimulus-plan-as-trade-war-looms
[3] Reuters, "Exclusive: Thailand to overhaul stimulus plan as trade war looms - sources," June 21, 2022. https://www.reuters.com/world/asia-pacific/exclusive-thailand-overhaul-stimulus-plan-as-trade-war-looms-sources-2022-06-21/
[4] Bangkok Post, "Thailand to drop handouts plan due to global uncertainties," June 11, 2022. https://www.bangkokpost.com/business/2142887/thailand-to-drop-handouts-plan-due-to-global-uncertainties
[5] Bloomberg, "Thailand Looks to Human Capital as the Future of Its Economy," June 9, 2022. https://www.bloombergquint.com/onweb/thailand-s-key-to-growth-is-human-capital
[6] The Nation, "Consumer confidence in Thailand at 27-month low," June 21, 2022. https://www.nationthailand.com/business/40377163
[7] Nikkei Asia, "Investing in digital Thailand: Japan's answer to Southeast Asia's tech boom?" June 21, 2022. https://asia.nikkei.com/Spotlight/Southeast-Asia-Tech-Boom/Investing-in-digital-Thailand-Japan-s-answer-to-Southeast-Asia-s-tech-boom
[8] Forbes, "Las Vegas Sands Reveals Plans For Thailand Resort," June 20, 2022. https://www.forbes.com/sites/susanward-davis/2022/06/20/las-vegas-sands-reveals-plans-for-thailand-resort/?sh=2f63bb742450
- The Thai government, in light of US tariff measures and global economic uncertainties, has revised its economic stimulus plan, aiming to boost sectors like tourism, real estate, and community economy.
- The Deputy Finance Minister emphasized that the government would cautiously allocate stimulus budgets and consider the World Bank's opinion to maximize benefits for the country, as accurate GDP forecasts were impossible under the current volatile economic conditions.
- Despite the challenging circumstances and the World Bank's revised GDP forecast, the Thai government is determined to achieve a GDP growth exceeding 3% in 2025, with key agencies like the Bank of Thailand and the Office of the National Economic and Social Development Council guiding the shift towards adaptable economic measures.
