Citibank Thailand has stated that US tariff hikes will have a limited impact on Thailand’s exports, as the country is not a primary target of US tax policies. According to Nalin Chutchotitham, an economist at Citibank Thailand, while the US tariff policy may have some indirect effects, it is unlikely to significantly disrupt Thailand’s trade relations.
“The US tariff policy is unlikely to significantly impact Thailand’s exports, as the country is not a strategic target for US tariff increases,” said Chutchotitham. However, the economist emphasized that potential tariff hikes on China, which would affect US-China trade, could have indirect consequences for Thailand, given its trade linkages with China.
The broader economic environment, impacted by US policies, is expected to elevate global uncertainties, putting pressure on trade and dampening import demand from Thailand’s key trade partners. In its 2025 forecast, Citi has lowered its export growth estimate to 2.8% in US dollar terms, down from 4.6% in 2024.
On a more optimistic note, Citi expects Thailand’s GDP to grow by 3.2% in 2025, up from 2.7% in 2024, with the recovery bolstered by increased domestic investment. The private sector’s investment is anticipated to gain momentum, particularly in sectors approved by the Board of Investment, such as electric vehicles, data centers, and food processing industries.
Tourism remains a key growth driver for the Thai economy, with Citi projecting 39.8 million foreign tourist arrivals in 2025 and a slight increase in spending per visitor, expected to reach USD 1,298. Tourism income is predicted to contribute 9.3% to Thailand’s GDP in 2025.
In terms of monetary policy, Citi expects the Bank of Thailand to maintain its policy rate at 2.25% for the year. However, if economic growth and inflation fall short of the central bank’s forecasts, a 25 basis point rate cut may be considered in the first half of the year.
Johanna Chua, Head of Emerging Market Economics and Chief Asia Economist at Citigroup, pointed out that the US is expected to raise tariffs on China, but the hike will be lower than the market’s anticipated 60%, with an average increase of 15% due to ongoing negotiations.
Citi’s forecast for Asia’s economic growth in 2025 has been downgraded to 4.3%, down from 4.8% in 2024, mainly due to the sluggish performance of the Chinese economy. China’s growth is projected to slow further to 4.2% in 2025 from 5% in the previous year.
