By Orathai Sriring and Kitiphong Thaichareon
BANGKOK (Reuters) -Thailand’s economic growth will be hit by U.S. tariffs on its exports, although the impact on activity won’t be as great as during the COVID-19 pandemic, a senior central bank official said on Thursday.
The U.S. tariffs have halted some production and delayed investment decisions, and their effect on Thailand’s exports will be seen in the second half of the year, Bank of Thailand Assistant Governor Sakkapop Panyanukul said.
“Global trade policy uncertainty is a large and prolonged shock that will affect Thailand in many ways”, he said at a press briefing.
Thailand is among Southeast Asian nations hardest hit by U.S. President Donald Trump’s proposed measures, facing a 36% tariff if a reduction can’t be negotiated before a global moratorium expires in July.
The economy is now likely to grow less than 2.5% this year, below a previous forecast, in part because higher U.S. imports to reduce Thailand’s trade surplus with America will affect local manufacturing, Sakkapop said.
“GDP will definitely decrease,” he said, adding how much it would decline was still unclear.
“The impact will not be small but it will not be as severe as during COVID,” he said.
Finance Minister Pichai Chunhavajira said on April 3 that tariffs could cut growth in Southeast Asia’s second-largest economy by 1 percentage point.
Because of a strong start to 2025, full-year export growth may not be too badly affected overall, Sakkapop said.
The baht has moved in line with regional peers, he said, adding the central bank would smooth out excessive volatility in the currency.
Inflation is likely to fall, driven by supply-side factors, but there is no pressure on monetary policy, he said.
In February, the central bank cut the key interest rate by 25 basis points to 2.00%. Its next rate meeting is on April 30, when it is due to give updated economic forecasts.
Pichai is due to have a meeting with U.S. officials next week to discuss the tariffs. The government has said it would increase imports of U.S. goods, such as corn, soybean meal, ethane and liquefied natural gas as it seeks to negotiate a better trade deal.
It has also said it will address non-tariff barriers, promote more Thai investment in the United States and crack down on false claims about the origin of products that use Thailand to ship to America.
(Reporting by Orathai Sriring, Kitiphong Thaichareon and Thanadech Staporncharnchai; Editing by John Mair and Emelia Sithole-Matarise)
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