Thai Export Growth Could Plunge to 0.8% Next Year

The Thai Chamber of Commerce warns that next year's exports risk expanding by only 0.8%, buffeted by potential Trump-era tariffs and El Niño. Thanawat Polwichai, president of the University of the Thai Chamber of Commerce and chair of its Economic and Business Forecast Center, said exports remain a "key protagonist" for Thailand's economy in 2026 and will likely keep that role in 2027. The university forecasts 17.8% export growth this year and about 7.4% next year. AI and data-center investment is a key driver, with Thailand amid large-scale investment in the sector, both from direct investment and electronic imports to support production, exports, and domestic investment. However, export growth faces risks, especially reliance on the U.S. market and high-end electronics, plus uncertainty over U.S. trade tax measures. Thanawat said a business survey reflects differing problems across sectors: industry prioritizes the Alternative Minimum Tax and U.S. trade measures, agriculture worries about climate, food prices and drought, while commerce focuses on reducing non-tariff barriers in ASEAN. "Export problems are not economy-wide but sector-specific, so solutions must target each sector," Thanawat said. Wichian Kaewsombut, director of the Trade Strategy Institute at the university, revealed the situation and trends for Thai exports in 2026-2027. The institute estimates full-year 2026 exports at about $400.8 billion, up 17.8% from 2025's $340.2 billion, a rise of roughly $60.6 billion, with a growth range of 15.3-20.5%. For 2027, exports are expected to slow to 7.4% growth, reaching about $430.5 billion, up $29.7 billion from 2026, with a wide forecast range of 0.8-11.1%, or $404.2-445.3 billion depending on the scenario. In the base case, 2027 exports to the U.S. are seen growing 7.4% to $106.1 billion, while electronics expand 14.2% to $103.7 billion. Imports are forecast to rise 8.2% to $478.6 billion, leaving a trade deficit of about $48.1 billion, the second consecutive year of deficit. The variation between scenarios hinges on the Alternative Minimum Tax rate, U.S. Section 301 measures, the durability of AI demand, and El Niño's impact on agricultural products. The worst case sees exports growing only 0.8%, while the best case sees 11.1% expansion. Thailand should use the current high-export period to diversify growth away from the U.S. market and electronics, which are vulnerable to tax measures and product cycles. Key steps include accelerating ART negotiations, preparing for U.S. Section 301 outcomes, closing the Thailand-EU FTA talks to access a steadily growing market, and promoting domestic electronic-component production to reduce import reliance. For agricultural products, solutions should match root causes: rice and cassava face volume risks, requiring drought and El Niño preparedness, while sugar's main problem is price.