Thai Deputy FinMin: Fiscal policy to fully stimulate economy, preparing over 40 bln baht for measures to cope with US tariffs

Thai Deputy FinMin: Fiscal policy to fully stimulate economy, preparing over 40 bln baht for measures to cope with US tariffs

Bangkok, July 2, 2025 — Deputy Prime Minister and Finance Minister Pichai Chunhavajira has announced that Thailand is preparing over 40 billion baht in fiscal policy measures to stimulate the economy and mitigate the potential impact of US tariffs. The announcement comes amidst growing concerns over the economic slowdown expected in the second half of the year due to the tariffs, which are set to take effect on August 1 [1].

The tariffs, which are part of a new trade measure announced by US President Donald Trump, will impose a 36% duty on Thai goods exported to the United States. This move has sparked concerns about Thailand's economic competitiveness and investment attractiveness, with leading economists warning that the country's GDP could contract by 1.1% this year if the tariffs are implemented [2].

Deputy Finance Minister Pichai expressed confidence that Thailand can negotiate a more favorable tariff deal before the August 1 deadline. He stated that the government has contingency plans ready in case negotiations fail, including the use of the 40 billion baht stimulus package. The package aims to provide targeted support to sectors most affected by the tariffs, such as the electronics and technology industries [1].

The central bank has also forecasted a slowdown in exports, with a 4% contraction expected in the second half of the year. The Bank of Thailand has called for targeted measures and business adaptation to address the headwinds facing the economy [1].

Economists have emphasized the need for Thailand to diversify its export markets and attract high-value investments to maintain its competitiveness. They have suggested that Thailand should consider opening its market to certain US products and accelerate free trade negotiations with other countries, such as the European Union [2].

The government faces the challenge of balancing export sector protection with domestic agricultural interests while navigating complex political coordination between ministries. The Deputy Finance Minister has called for unity and strategic decision-making to navigate the crisis and maintain economic momentum.

References:

[1] https://www.marketscreener.com/news/latest/Thai-central-bank-sees-economy-slowing-in-second-half-as-tariffs-hit-exports-50463810/
[2] https://www.nationthailand.com/business/economy/40052298