Finance ministry to raise Bt500bn to cushion impacts of US tariffs

The Finance Ministry plans to form a Bt500 billion “standby fund” from local financial institutions to mitigate the impacts to the business and agricultural sectors from the reciprocal tariffs to be imposed on Thai exports to the US market.

Finance Minister Pichai Chunhavajira said that the fund is necessary, because the impacts on the whole Thai economy from the tariffs are unavoidable, even though President Donald Trump’s position on keeps changing and is unpredictable.

He said the Finance Ministry will consult the National Economic and Social Development Council on the fund’s mobilisation plan, in a bid to keep the growth rate projection for this year at a minimum of 3.0%.

He indicated, however, that the third phase of the “digital wallet” scheme may be have to be reviewed, because of the need to cushion the impacts of the tariffs.

The International Monetary Fund (IMF) has predicted that global economic growth this year may be just 1.8%, essentially due to the US trade war and tariff increases.

Meanwhile, Finance Permanent Secretary Lavaron Sangsnit said that the Bt500 billion fund could be achieved through a review of the current and next year’s budgets, soft loans from state-owned financial institutions, the Central Fund and a review of the digital wallet scheme, noting that there is still 150 billion baht remaining for the scheme.

He warned, however, that borrowings by the Finance Ministry, even from local financial institutions, may increase Thailand’s public debt by 0.3% of GDP, while assuring that this will not impact the country’s financial credibility, providing that the “standby fund” is used effectively.

Chantanon Wannakejohn, secretary general of the Agricultural Economics Office, said the growth rate projection for the agricultural sector this year remains between 1.8% and 2.0%, compared to last year’s -1.0%, without recalibrating for the impacts from the US reciprocal tariffs.