Thailand Eyes Exit From US Watchlist as Tech Exports Buoy Economy
Thailand's tech-driven exports and data center investments are steadily supporting economic growth, while the country eyes removal from the US trade watchlist as its current account surplus narrows below the monitoring threshold.
The Bank of Thailand reported on July 31 that Thailand's June economy held steady month-on-month, with private consumption improving thanks to government stimulus and rising electric vehicle sales. Merchandise exports and private investment continued to expand, driven by technology products, a global electronics industry upturn, and data center investments. However, industrial manufacturing declined across multiple sectors, particularly petroleum refining due to scheduled maintenance shutdowns and non-EV vehicle production, while the services sector slowed as foreign tourist arrivals and tourism revenue fell, hitting hotels and restaurants hard. Overall second-quarter economic growth decelerated from the first quarter due to higher energy prices and travel restrictions from Middle East conflict, weakening tourism and private consumption despite government support measures. Technology exports and data center investments helped offset the services slowdown. General inflation fell in June with crude oil prices, though core inflation rose as businesses passed along costs. The current account deficit narrowed while labor markets remained stable. Key factors to watch include war developments and US trade policy, tourism recovery, living costs and business expenses, government measures, and potential El Niño effects. The Bank of Thailand also noted that in the latest US Treasury report released July 24, Thailand remains on the US monitoring list, meeting only one of three criteria—a trade surplus with the United States of approximately $72 billion—after its current account surplus fell from 3.8 percent to 2.8 percent of GDP. The US Treasury acknowledged that the central bank's repatriation relaxation and gold transaction oversight measures aim to stabilize the baht rather than gain trade advantage. Thailand has a chance to be removed from the monitoring list in the next assessment round if it meets only one criterion, with the central bank tracking progress toward that goal.
