Economists Cut Thai, Malaysian Growth Forecasts on Trade Turmoil

Economists have significantly lowered growth forecasts for Thailand and Malaysia, citing the negative impact of ongoing global trade tensions spurred by U.S. policies. The median GDP growth prediction for Thailand in 2025 has been revised down to 2.1% from 2.8% in February, reflecting concerns about the export-dependent nation's economic outlook amidst trade turmoil.

Analysis

Economists have significantly revised downwards their GDP growth forecasts for Thailand and Malaysia, highlighting the tangible impact of global trade tensions on these export-reliant economies. Specifically, Thailand's median GDP growth projection for 2025 has been cut to 2.1%, a substantial reduction from the 2.8% anticipated in a February survey of 27 economists conducted by Bloomberg. This revised forecast not only indicates a slowdown from the previous year's 2.5% growth but also underscores the pessimistic outlook stemming from continued trade turmoil, largely attributed to US trade policies. The data signals a strongly negative sentiment surrounding these economies, reflecting heightened concerns about their near-term economic performance within the broader context of emerging market vulnerabilities and disruptions to international trade flows.

Key Decisions for Investors

• Investors should exercise caution and review exposures to Thai and Malaysian assets, particularly in export-oriented sectors, given the sharply reduced growth forecasts and the negative sentiment driven by trade uncertainties.
• It is advisable to closely monitor upcoming economic data releases and trade policy developments related to these Southeast Asian nations, as further deterioration could lead to increased market volatility and asset repricing.
• Consider the potential for increased currency and equity market weakness in Thailand and Malaysia due to the downgraded economic outlook and the persistent impact of global trade disputes on these export-dependent economies.