Thai economy’s competitiveness is declining, central bank says

BANGKOK, Jan ‌7 : Thailand’s central bank said on Wednesday that the economy is facing challenges, including a sustained decline in competitiveness, with exports expected to be negatively affected by U.S. tariffs.

Southeast Asia’s second-largest economy has been struggling with ‌an appreciating currency, U.S. tariffs, high ‌household debt, a border conflict with Cambodia and political uncertainty ahead of elections in early February.

Ahead of a monetary policy forum, the Bank of Thailand said that GDP growth in the second half ‍of last year is expected to have reached 1.3 per cent year-on-year, with exports up 9.1 per cent over the period.

It said deflation risks remained low and medium-term inflation expectations ​were still anchored ‌within the country’s target range of 1 per cent to 3 per cent.

The central bank said the strong baht ​was tightening liquidity for small- to medium-sized exporters, which ⁠is weighing on shipments.

BOT deputy ‌governor Piti Disyatat told the Reuters Global Markets ​Forum on Tuesday that economic growth was expected to have turned positive in the ‍fourth quarter of 2025, and he expected last year’s ⁠growth forecast of 2.2 per cent would be met.