Abstract
SCB EIC has downgraded the global economic forecast for 2025 to 2.5% citing impacts from Trump 2.0 policies. The U.S. economy will experience negative impacts, while global inflation may not rise significantly due to a slowing economy. The report also discusses the Thai economy growing in Q4 but facing pressure from Trump 2.0, along with challenges in private investment and retail loan quality. The report suggests policy rate cuts by MPC and expects the Baht to weaken slightly in the short term but strengthen in the second half of 2025. Thailand’s economic development should focus on bridging the gap between different sectors for quality economic growth.
Summary
SCB EIC Downgrades Global Economic Forecast Amid Geopolitical Tensions
SCB EIC has revised its 2025 global economic growth forecast from 2.8% to 2.5% due to anticipated impacts of Trump 2.0 policies. These policies are expected to exacerbate geopolitical tensions and trade protectionism, affecting global economy primarily through trade, investment, and labor markets. Despite some measures to mitigate impacts, political conflicts in countries like Germany, France, and South Korea may hinder effective responses. The U.S. will experience net negative impacts from Trump 2.0, with some policies stimulating domestic investment.
Uncertain Monetary Policy Directions Set to Diverge
Global monetary easing is becoming more uncertain and divergent. SCB EIC predicts the Fed to adopt a cautious approach due to inflation risks from Trump 2.0 policies, while other central banks may implement rate cuts to address challenges. Thailand will likely face pressures from Trump 2.0’s trade measures in the second half of 2025, impacting export sectors like electronics and automobiles.
Private Investment Recovery in 2025 and Challenges Ahead
Private investment is expected to modestly recover in 2025, with ongoing challenges in the industrial sector such as competition from imports. SCB EIC projects deterioration in overall retail loan quality amid tightened lending standards, with expectations of a policy rate cut by the MPC in February 2025. The Thai baht may weaken slightly in the short term but strengthen in H2/2025, influenced by global economic factors and capital flows.
Source : Outlook Quarter 4/2024
