IMF advises ASEAN to boost regional trade amid Trump tariff threats

Speaking at a press conference in Washington DC on Thursday, Kristalina Georgieva, managing director of the IMF, said that Asian economies are encountering considerable difficulties as they remain highly dependent on exports.

“Asia is in a challenging position following the implementation of new tariff policies, which have had a substantial impact on several countries,” she said. “At the same time, however, the region has built up a degree of economic resilience in recent years, with steady growth, prudent inflation control, and supportive fiscal policies.”

Georgieva recommended that Asian countries with sufficient policy space make careful use of both monetary and fiscal tools to address the challenges ahead.

Nonetheless, she expressed satisfaction with the growing economic cooperation, policy dialogue, and regional trade among Asian economies. At present, only 21% of trade in Asia occurs within the region.

Georgieva believes that strengthening regional trade could help offset the decline in global trade growth.

Meanwhile, Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, told Krungthep Turakij that Thailand has been significantly affected by US tariffs, as exports to the United States account for 18% of the country’s total exports — a relatively high proportion. This comes at a time when Thailand’s economy is already experiencing a slowdown.

The IMF has recommended that Thailand, along with other ASEAN countries, increase regional trade, which currently accounts for just 20% of total trade in the bloc.

“Enhancing trade within the region would allow member states to better diversify their export markets,” he said, adding that ASEAN ranks as the world’s fourth largest economy by combined GDP.

When asked about the reasons behind Thailand’s subdued GDP growth over the past decade, Thomas Helbling, deputy director of the IMF’s Asia and Pacific Department, pointed to two main factors: a sluggish post-Covid-19 recovery, particularly in the tourism sector, and long-term structural issues such as an ageing population and slow productivity growth.

To address these challenges, the IMF has advised Thailand to open up its markets, enhance workforce skills, increase public investment to stimulate private sector activity, and reallocate resources to high-potential sectors.

These efforts, Helbling said, would help reduce Thailand’s over-reliance on exports to Western markets.