Central bank recommends using stimulus fund to support exporters amid trade challenges

The Bank of Thailand (BOT) has urged the government to prioritize the recently approved 157-billion-baht economic stimulus fund toward supporting exporters and domestic manufacturers facing mounting challenges from intensified import flooding and global trade tensions.

The Cabinet meeting on May 20 approved the 157-billion-baht economic stimulus plan proposed by the Ministry of Finance, which involves reallocating the budget originally intended for the digital wallet handout program (Phase 3) to other projects.

The Secretariat of the Cabinet urgently requested BOT to provide opinions on relevant matters to assist the Cabinet’s decision-making. BOT Governor Sethaput Suthiwartnarueput submitted key recommendations to the Cabinet, summarized as follows:

BOT agrees with the timely review and adjustment of the budget plan to align with current economic conditions. The plan emphasizes investment in infrastructure, productivity enhancement, and maintaining employment levels—especially in the manufacturing and export sectors, which face pressures from trade wars and retaliatory tariffs imposed by major economies.

BOT highlights the need to focus more on mitigating impacts and supporting business adaptation, with additional observations:

1. Budget allocation should prioritize relief for groups directly affected, including:

• Exporters to the U.S. and related supply chain businesses.
• Domestic manufacturers impacted by intensified import flooding, which exacerbates structural problems in Thai manufacturing. From 2022 to 2024, imports of final goods increased by about $13 billion, mostly affecting SMEs with limited capacity to adapt.

Additionally, programs should help businesses, especially SMEs, to improve competitiveness and expand into new markets.

2. Urgent measures are needed to tackle import flooding, or else economic stimulus efforts may be less effective. Suggested actions include:

• Strict enforcement and inspection focusing on product standards, customs checks, and preventing misuse of Thai routes for re-export.
• Accelerated investigation and dispute resolution regarding dumping and unfair foreign market practices.
• Requiring online platforms selling goods in Thailand to establish local offices to enforce product standards and VAT collection.
• Additional tax measures, such as import taxes, quotas, or VAT collection on goods valued under 1,500 baht.