Thailand Manufacturing Grows, Faces Trade Deficit Risks

Thailand's manufacturing production index rose by 2.17% year-on-year in April 2025, surpassing expectations and marking a second consecutive month of growth, with gains driven by food products, clothing, basic iron and steel, automotive manufacturing, and electronics. Despite this, cumulative manufacturing output for the first four months of 2025 was down 0.75% compared to the previous year, leading the Ministry of Industry to revise its annual growth forecast to 0-1%. Export increases helped replenish inventories, though car production continued to decline. The sector still faces challenges from ongoing U.S. tariffs, with the central bank noting that while exports to the U.S. have slowed, they remain high and the full impact of new tariffs is yet to be seen. Thailand also recorded a trade and current account deficit in April, highlighting broader economic pressures. Overall, the manufacturing sector shows short-term improvement but remains vulnerable to external and internal headwinds.