Asia Minute: Thailand’s ‘sugar rush’ of exports is wearing off
U.S. tariffs of 19% are pressuring Thailand, its largest export market, after a temporary boost from front-loaded shipments. Growth risks loom as orders slow, household debt rises, and Moody’s issues a negative outlook. Tourism is also weakening, with visitor projections cut 10%, compounding economic challenges across Southeast Asia.
United States tariffs are starting to hit some economies in the Asia Pacific. That includes one of the largest economies in Southeast Asia, which is facing challenges that may soon spread across the region.
Thailand has an export problem. Its largest overseas market is the U.S., where it now faces tariffs of 19%.
That’s similar to other economies in Southeast Asia, but a bit higher than the 15% faced by Japan and South Korea.
A pattern is emerging in several Asian economies transitioning to higher tariffs in the U.S. Second-quarter growth was higher than expected.
That’s the quarter that closed with the end of June — when many companies were rushing to fill orders and ship products before new tariff rates went into effect.
The head of Capital Markets Research at Thailand’s Kasikornbank calls that a “sugar high of exports front loading.”
The question now is how severe the crash will be after that market distortion wears off.
For Thailand, there are some worrisome trends. Household debt is going up.
In May, Moody’s mentioned concerns about that debt when it downgraded its outlook for Thailand’s economy from stable to negative — the first time in nearly 17 years it’s used that word for Thailand’s economic outlook.
On Monday, there was more bad news: tourism numbers are going down.
Thailand’s National Economic and Social Development Council has slashed its estimate for foreign tourism by 10% for the rest of this year.
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Source : Hawaii Public Radio
