Central Bank Minutes: Thai manufacturing faces competition challenges

Thailand’s manufacturing sector faces growing competitiveness challenges, as highlighted in recent central bank assessments. The Bank of Thailand (BOT) noted that sustained declines in competitiveness, exacerbated by U.S. tariffs and an appreciating baht, are weighing on export performance, particularly for small- to medium-sized exporters according to central bank assessments. These pressures come amid broader economic headwinds, including high household debt levels and political uncertainty ahead of February elections.

Despite these challenges, the BOT reported that GDP growth in the second half of 2025 reached 1.3% year-on-year, with exports rising 9.1% during the period. Deputy Governor Piti Disyatat stated that economic growth turned positive in Q4 2025 and expressed confidence in meeting the year's 2.2% growth forecast. The central bank emphasized that deflation risks remain low, with inflation expectations stable within the 1%–3% target range.

The strong baht, while beneficial for import-dependent sectors, has tightened liquidity for exporters, reducing shipment volumes. Analysts attribute this to global trade dynamics and domestic policy constraints. The BOT's monetary policy forum underscored the need to balance growth support with inflation control, though no immediate rate adjustments were indicated.

Manufacturing competitiveness remains a critical focus, with the central bank cautioning that structural issues—such as trade tensions and currency volatility—could hinder long-term export resilience. Policymakers are monitoring these risks closely as they navigate an uncertain economic landscape.

According to central bank assessments: Reuters, January 7, 2026.