Economic Outlook and Challenges for Thailand
The global economy is showing signs of improvement, which is expected to lead to a significant increase in Thai exports this year. According to the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), exports are projected to grow by 9.5-10%, surpassing earlier estimates. However, despite this positive outlook, the committee has pointed out that Thailand may not see substantial benefits from this growth.
Previously, the JSCCIB had forecasted export growth of only 2-3% for 2025. The recent upward revision comes as international trade improves, with concerns over US tariffs decreasing. Additionally, new purchase orders for industrial products have been reported. Poj Aramwattananont, chairman of the Thai Chamber of Commerce and head of a recent JSCCIB meeting, highlighted these developments.
However, Mr. Poj expressed caution about the nature of the export growth. He noted that most of the increase is driven by transshipment products—items assembled in Thailand using imported components. This reliance on foreign materials means that local industries are not fully capitalizing on the export boom.
This situation raises concerns about potential penalties from the US, which could result from transshipment activities through Thailand. Such penalties might harm the competitiveness of Thai industries and impose heavy tax burdens on local businesses. To address these challenges, the JSCCIB is calling on the government to accelerate its spending plans aligned with the “Quick Big Win” policy.
The Made in Thailand campaign and the “Khon La Khrueng Plus” co-payment scheme are also part of the strategy to promote locally produced goods in public projects. These initiatives aim to stimulate economic growth and help it reach nearly the 2.5% rate seen in the previous year.
The JSCCIB has maintained its GDP growth projection for 2025 at 1.8-2.2%. Inflation is expected to remain low, within a range of -0.1% to 0.1%, which is a slight decrease from an earlier estimate of 0.5-1%.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, has voiced opposition to three draft bills related to labor protection, clean air, and factory operations. He argues that these proposals pose long-term economic risks.
These bills include changes to labor regulations, such as reducing the standard workweek from 48 to 40 hours, limiting hazardous work to 35 hours, and mandating two-day weekends. Another amendment aims to promote remote work to improve work-life balance.
The JSCCIB warns that implementing these reforms could be detrimental to an already sluggish economy. They believe that such measures might hinder business operations and negatively impact workers.
In conclusion, while the global economic environment appears favorable for Thai exports, the country must navigate several challenges to ensure that the benefits of this growth are realized. The JSCCIB’s recommendations emphasize the need for strategic government action and careful consideration of proposed labor reforms to support sustainable economic development.