Thailand is bracing for a tougher second half of 2025 as rising U.S. tariff threats and renewed domestic political chaos cloud its already sluggish economic recovery. Roong Mallikamas, deputy governor of the Bank of Thailand (BOT) and one of two top contenders to become the next central bank chief, says monetary policy must stay flexible and accommodative.
Key Highlights:
Economic Growth Worries
- GDP growth is projected at just 2.3% in 2025, down from 2.5% in 2024.
- Ongoing tariff threats from the U.S. (possibly as high as 36%) are hurting confidence and demand.
- Domestic structural issues — high household debt, weak consumption — are magnifying the slowdown.
Monetary Policy Signals
- BOT’s benchmark rate remains at 1.75% after several cuts (Oct, Feb, Apr).
- Roong suggests there’s room for further easing if conditions worsen.
- Negative inflation isn’t a sign of deflation but does reflect “very soft demand.”
Roong’s Standpoint
- Supports BOT independence, but urges proactive collaboration with the government to avoid policy confrontations.
- Stressed early dialogue can ease tension between the BOT and the ruling Pheu Thai party, which has criticized the central bank’s stance on rates and the baht.
- Advocates for clear communication and policy alignment to manage shocks.
Political & Trade Context
- Thailand’s PM Paetongtarn Shinawatra suspended (Thailand Central Bank), adding to uncertainty.
- The Finance Minister is in Washington negotiating a trade deal before the July 9 deadline.
- Despite political drama, Roong says core functions like spending and trade talks will continue.
Currency Watch
- The baht has risen 5.7% vs. the dollar this year.
- BOT will monitor for speculative influences, aiming to support exporters without excessive intervention.
Why It Matters:With inflation muted, political leadership in flux, and U.S. tariffs looming, Thailand’s economic stability hinges on the central bank’s ability to stay agile, independent, and responsive. Roong’s approach suggests a pragmatic and conciliatory tone, aiming to bridge the gap between technocrats and politicians without sacrificing policy integrity.
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