Bangkok: The Federation of Thai Industries (FTI) is seeking urgent discussions with the Bank of Thailand (BOT), the National Economic and Social Development Board (NESDB), the Ministry of Finance, and the Ministry of Commerce. The intention is to address pressing economic issues and ensure consistent information amid various factors impacting the economy. The FTI aims to maintain the GDP growth rate for 2025 at 1.5-2% and is proposing a reduction in interest rates by 0.75% this year due to ongoing economic uncertainties and a contraction in exports.
According to Thai News Agency, the global economy remains uncertain in the second half of 2025. While trade negotiations with the United States have progressed, especially with China and the United Kingdom, a concrete resolution is unlikely by the July 9, 2025 deadline. This situation might lead to increased tariffs if the deadline is not extended. Additionally, geopolitical tensions in the Middle East could escalate, further impacting global economic stability.
The Thai economy is expected to show limited growth, with a forecasted expansion of 1.5-2.0% for the entire year. The growth rate is contingent upon maintaining a 10% tax rate in the second half; otherwise, it may drop to 1.5% amid declining domestic demand and a potential 10% contraction in export value. This scenario could severely impact the manufacturing sector and employment. Furthermore, lower-than-expected Chinese tourist numbers and political uncertainties might affect fiscal budget disbursements for 2025 and 2026.
The ‘You Fight, We Help’ project, initiated on December 12, 2024, aims to tackle household debt issues sustainably. With 1.4 million debtors registered, 630,000 are eligible under the program, accounting for 460 billion baht in debt. The project has entered its second phase, enhancing measures to assist vulnerable debtors. It includes proactive debt restructuring plans but requires simultaneous efforts in income generation and addressing informal economy challenges.
Concerns about the rapidly appreciating baht, which has reached 32.5 baht per dollar, are growing. This appreciation, stronger than regional counterparts, is not aligned with the slowing economy, tight financial conditions, and sluggish credit growth. The FTI urges the BOT to reduce policy interest rates and monitor the currency’s direction to align with economic fundamentals, addressing factors like gold trading and a high balance of payments surplus.
Current export figures, showing high growth, are driven by high imports. Structural issues persist, such as false export rights and low-quality imports. The FTI plans to meet with key economic agencies to align strategies, focusing on industrial adjustment and improving Thailand’s production capabilities. The aim is to enhance trade and investment policies that support domestic supply chains and industrial protection.
Additionally, political stability is crucial for economic progress. The political situation in Thailand, including potential US retaliatory tariffs and Thai-Cambodian border trade issues, adds complexity to the economic landscape. The FTI emphasizes the need for clear legal enforcement to address false export rights, citing a 27% increase in exports to the US not attributed to domestic production.
The FTI believes that the BOT should consider reducing interest rates by another 0.75% to stabilize the economy. With political factors at play, such as the Constitutional Court’s decision affecting the Prime Minister’s duties, the economic environment remains fragile, necessitating urgent and proactive discussions.