กกร. เผย ศก.ไทยปี 68 โตจำกัด สงครามการค้า-บาทแข็ง กดดันส่งออกJoint Private Sector Committee Reveals Thailand's Economy in 2025 to Grow Moderately Amid Trade War and Strong Baht Pressuring Exports

On Wednesday, February 5, 2025, Mr. Kriangkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), chaired a meeting of the Joint Private Sector Committee of three institutions (JPS) with Mr. Sanan Angubolkul, Chairman of the Thai Chamber of Commerce, and Dr. Pacharapoj Nantharamas, Representative of the Thai Bankers’ Association, present at the press conference.

A new trade war has begun in Mexico, Canada, and China amid retaliations, with the United States announcing an increase in import tariffs on targeted countries, imposing a 25% tariff on Mexico and Canada and a 10% tariff on China. This will have negative effects on economic growth in 2025 and will increasingly impact growth in 2026. Furthermore, immediate policies are being pushed through executive orders, including previously pledged ones, covering issues such as unfair trade practices, immigration, and withdrawal from the Paris Agreement, among others.
Trade conflicts are pressuring foreign goods to compete in the market and affecting Thailand's manufacturing sector. The influx of foreign products, resulting from the trade war and decoupling issues, is overwhelming the domestic market, which affects production and employment. A study of these impacts, as proposed in the JPS white paper by the Ministry of Commerce, indicates that key product categories significantly affected include steel, plastics, electrical appliances, dietary supplements, clothing, glass and ceramics, and cosmetics.

The Thai economy in 2025 is expected to grow moderately. The severe trade barriers and the continuously strengthening baht present challenges to exports, while certain industrial sectors face competition from foreign products. Domestic demand remains weak, making it imperative to devise strategies to mitigate impacts both in the short and long term by leveraging the supply chain decoupling trend to attract foreign direct investment (FDI). Last year, investment promotion applications reached 1.14 trillion baht, the highest in a decade. Additionally, trade agreements need to be accelerated beyond the recently completed Thailand-EFTA FTA to enhance the competitiveness of Thai goods compared to neighboring countries.

Economic projections for 2025 by JPS:
(As of December 2024) Year 2024
GDP 2.8
Exports 5.4*
Inflation 0.4*

(As of January 2025) Year 2025
GDP 2.4 to 2.9
Exports 1.5 to 2.5
Inflation 0.8 to 1.2

(As of February 2025) Year 2025
GDP 2.4 to 2.9
Exports 1.5 to 2.5
Inflation 0.8 to 1.2

Note: *Actual figures
Source: NESDC, Ministry of Commerce and estimates by JPS.

The Joint Private Sector Committee (JPS) discussed preparedness strategies to handle the impacts of U.S. policies, particularly regarding the recently enforced import tariff measures against Mexico, Canada, and China. This has led the counterpart nations to signal retaliations through tax and trade measures against the U.S., putting global trade under pressure. Meanwhile, Chinese goods that cannot be exported to the U.S. market may flood back to Thailand and its trading partners, intensifying price competition. Therefore, JPS proposed preparedness strategies to address both direct and indirect impacts as follows:

1. State-level negotiations to prevent and mitigate the use of trade measures from the U.S. while fostering cooperation with ASEAN countries to strengthen the regional economy.
2. Support in legal and trade regulations to assist private sectors affected by U.S. trade measures. 
3. Integration to assist domestic industries and reform laws to maintain competitive capabilities. 
4. Utilize additional trade measures beyond anti-dumping measures, expedite the investigation period for trade measure applications, and implement import control measures in accordance with the Export and Import of Goods Act B.E. 2522 (1979).
5. Control the establishment or expansion of factories, as well as promote industries with overcapacity, including strict regulation of industries in Free Zones to prevent illegal domestic sales of products and raw materials.
6. Promote domestically produced goods or products certified as Made in Thailand (MIT), including increasing government procurement ratios, facilitating the expansion of private sector markets, and establishing conditions for using domestically produced products in governmental projects, such as ensuring at least 90% of project value in housing for Thai people comes from Thai products.

The government should provide opportunities for the private sector to participate in giving opinions and recommendations on preparedness against the impacts of U.S. trade policies.

The Joint Private Sector Committee (JPS) expressed its support for the government in elevating the issue of PM2.5 dust pollution to national priority after finding that this problem directly impacts public health, tourism image, causes lost business opportunities for outdoor activities, and affects the overall economy. Therefore, to elevate measures to resolve PM2.5 dust pollution, JPS discussed proactive approaches to address this issue with key measures as follows: 1) Support subsidies during the transition to accelerate the adoption of technology and innovation to mitigate dust and combustion problems in agriculture. 2) Promote sustainable management of forest areas to reduce wildfire issues and stimulate efficient resource use. 3) Facilitate private sector mechanisms to participate in various committees under the Clean Air Act and related laws. 4) Support the use of the One Map system and prepare to comply with the EUDP under the EU Deforestation Regulation to manage agricultural and forest areas. 5) Utilize ASEAN cooperation mechanisms to coordinate regional prevention and control of PM2.5 dust and wildfires. JPS emphasized that these measures will help reduce economic impacts from PM2.5 issues and enhance collaboration between government, private sectors, and civil society for an effective and sustainable resolution to PM2.5 pollution.

Regarding the Regulatory Guillotine, JPS recognizes the necessity for Thailand to reform its legal system comprehensively and therefore proposes to expedite the amendment of laws that hinder progress and are incompatible with the current situation by prioritizing them for rapid effectiveness, in order to maintain competitive capability, promote transparency, and facilitate ease of doing business.

In the JPS meeting, support was expressed for the approach to uplift the management of proxy accounts by the Thai Bankers Association and member banks. Previously, systems for safeguarding Mobile Banking have been developed to prevent money draining applications and remote access controls, to cease sending SMS messages with links in customer communications, and providing a 24/7 hotline for incident reporting in conjunction with the Online Crime Problem-Solving Operations Center (AOC). A Central Fraud Registry has been developed for information exchange in the banking sector to share data on suspicious transactions and proxy accounts, resulting in the suspension of over 1.8 million proxy accounts, with additional measures being prepared for managing legal entity proxy accounts. For success, it is essential that all sectors participate in managing financial crime risks from upstream to downstream, including government, private sector, telecommunications service providers, platform service providers, digital asset businesses, and E-Wallet providers, as well as the public to remain alert and well-informed about financial threats for effective and sustainable financial crime prevention.