Thai Finance Minister Warns of Trade War "Air Pocket" Impact; Budget Review Looms

Pichai Chunhavajira signals economic adjustments amid global trade tensions, with potential shifts in budget allocations and digital wallet scheme

 

Thailand's Finance Minister, Pichai Chunhavajira, has warned that the ongoing trade war is dragging the Thai economy into an "air pocket," with significant global repercussions anticipated.

 

He projects first-quarter GDP growth to remain within 2.5-3%, but has signalled adjustments to the Budget Year 2069 to prioritise urgent economic stimulus projects and a potential review of the digital wallet scheme.

 

Speaking at the 150th anniversary of the Ministry of Finance , during the "MOF Journey 150 Years: The Path of Thai Finance" event at the Queen Sirikit National Convention Center, Pichai addressed the "Global Transition: The Thai Economy Under a Turning Point."

 

He highlighted the disruptive impact of US retaliatory tariffs on global free trade, outlining Thailand's strategy to bolster imports and exports, particularly in agricultural processing and energy sectors, to mitigate the effects.

 


"I believe that, following negotiations, if the US establishes equitable tariff rates with competitor nations, Thailand will not be disadvantaged. I am confident that our negotiation proposals will yield positive outcomes," Pichai stated.
 
 



 

He acknowledged the sensitive nature of tariff discussions, noting that many countries are engaging in discreet, high-level talks to find suitable solutions.

 

Despite the global economic uncertainty, Thailand remains an attractive investment destination, with investment promotion applications in the first three months of 2025 exceeding 400 billion baht, representing 40-50% of GDP. However, future investment promotion will focus on strategic sectors and the development of domestic supply chains.

 

The government is also actively pursuing debt relief measures, with plans to expand the "You Fight, We Help" scheme to cover more individuals, potentially increasing eligible debt amounts. These adjustments are expected to be presented to the Cabinet for approval in June-July.
  



 

While projecting first-quarter GDP growth of 2.5-3%, Pichai emphasised the need for vigilant monitoring of the global economic landscape, particularly the impact of potential uncertainties on exports. Contingency measures will be prepared, focusing on reviewing existing budgets and avoiding unnecessary new debt.

 

The Budget Year 2069, currently under parliamentary review, will be subject to discussions to ensure appropriate allocations for urgent economic needs. This includes significant funding for economic stimulus and a potential review of the digital wallet project, depending on evolving economic conditions.

(2025/05/01-00:00)