Bangkok: The Federation of Thai Industries is expressing concern over the strengthening of the Thai baht, which is expected to negatively impact the nation’s exports and tourism sectors. The president of the Federation of Thai Industries (FTI) highlighted that the baht’s current strength is unnecessary and could potentially have severe repercussions for these key economic areas.

According to Thai News Agency, Mr. Kriangkrai Thienukul, President of the FTI, pointed out that the Thai baht appreciated to 31.748 baht per US dollar, a level that does not accurately reflect the current state of the Thai economy. He noted that the economy and purchasing power are weak, and under such circumstances, the baht would typically weaken as well. However, the weakening US dollar has caused regional currencies to appreciate, with the baht appreciating by over 7% since the first half of the year. This appreciation has made the baht the second-strongest currency in the region after Taiwan and the fifth-strongest in the world, presenting challenges for exporters, including a 19% US import tariff and renewed baht appreciation.

The tourism sector is also at risk, with concerns that a strong baht will deter tourists from visiting Thailand, as they might choose destinations like Vietnam, where the Dong has weakened by more than 3%. The first half of the year saw a rapid export expansion and concerns about US tariffs, leading to a 15% growth in Thai exports. However, the second half of the year is expected to bring challenges, with a projected decline in exports and a 30% drop in Chinese tourists. Despite efforts to replace Chinese tourists with visitors from other countries, Thailand is unlikely to meet its target of 35-36 million foreign tourists, with only 32 million expected by 2025. The country’s GDP growth is projected to be between 1.8-2.0% this year, following a 2.5% growth in 2024.