By Kitiphong Thaichareon and Orathai Sriring
BANGKOK (Reuters) -A strong first half of 2025 has Thailand's economy on track to grow 2.2% this year, slightly higher than a previous forecast of 2.1%, the finance ministry said on Wednesday, although it cautioned U.S. tariffs could see momentum slow later this year.
Exports, a key driver of Thai growth, are expected to rise 5.5% this year, up from an earlier forecast of 2.3%, Pornchai Thiraveja, head of the finance ministry's fiscal policy office, told
a press conference.
"In the first half of the year, the economy expanded well, for the second half, we must monitor the impact of U.S. tariffs," he said, adding forecasts were based on U.S. tariff rates of 15% to 36%.
The estimated impact of border conflict with Cambodia is limited to local property damage, he said, adding the border trade value between the two countries was just over 1% of total exports.
There could be some impact on labour as Cambodian workers account for about 12% of migrant workers in Thailand, but businesses are expected to find replacement labourers, Pornchai said.
In June, the Bank of Thailand lifted its central-case growth forecast to 2.3% for 2025, almost matching last year's 2.5%.
Thailand faces a potential 36% tariff on its exports to the United States, its biggest export market, if a deal cannot be reached before August 1.
On Tuesday, Finance Minister Pichai Chunhavajira said he expected talks with Washington to be concluded before August 1, and expected the tariff rate to be below 36%.
He has said tariff rates on Thailand were expected to align with other countries in the region.
Vietnam and Indonesia now face U.S. tariffs of 20% and 19%, respectively, much lower than the levels announced in April.
The finance ministry lowered its forecast for foreign tourist arrivals, another key driver of growth, to 34.5 million this year from a previous estimate of 36.5 million.
In 2019, before the pandemic, Thailand had a record of nearly 40 million visitors.
(Reporting by Orathai Sriring, Kitiphong Thaichareon and Thanadech Staporncharnchai; Writing by Chayut Setboonsarng; Editing by David Stanway and John Mair)
