BANGKOK, June 30, 2025 — While much of Asia’s financial landscape saw robust gains in the first half of 2025, Thailand’s equity market bucked the trend, weighed down by political instability and looming trade threats. The benchmark SET index has slumped to a five-year low, making it one of the region’s worst performers.
Political Uncertainty and Border Tensions
Thailand’s market woes stem largely from a political crisis triggered by a leaked conversation involving a border dispute with Cambodia. The diplomatic fallout has rattled investor confidence and raised concerns over the country’s tourism-dependent economy. Analysts warn that prolonged tensions could further erode Thailand’s economic outlook.
Index | Country | YTD Change (%) |
---|---|---|
KOSPI | South Korea | +27% |
Hang Seng | Hong Kong | +20% |
VN Index | Vietnam | +12% |
Sensex | India | +9% |
ST Index | Singapore | +7% |
Dow Jones | US | +5% |
Nikkei Stock Average | Japan | +3% |
Shanghai Composite | China | +2% |
PSEi | Philippines | +1% |
TAIEX | Taiwan | 0% |
IDX Composite | Indonesia | -2% |
KLCI | Malaysia | -4% |
SET | Thailand | -15% |
Tariff Threats from Washington
Adding to the pressure is the threat of a 36% U.S. tariff on Thai exports, part of President Donald Trump’s sweeping “reciprocal” tariff policy announced in April. With the 90-day negotiation window set to expire on July 9, Thai officials are racing to secure exemptions. The uncertainty has cast a long shadow over export-driven sectors.
Regional Contrasts: Korea and Hong Kong Shine
In stark contrast, South Korea and Hong Kong posted over 20% gains in their benchmark indexes. Korea’s rally was fueled by postelection optimism and a tech surge led by AI giants like Samsung and SK Hynix. Meanwhile, Hong Kong’s IPO market roared back to life as Chinese firms sought refuge from U.S. financial scrutiny.
Currency and Bond Trends
Despite equity market weakness, Thailand’s bond yields have declined, reflecting investor expectations of monetary easing. The baht has remained relatively stable compared to the surging New Taiwan dollar, which gained over 10% against the U.S. dollar amid trade deal speculation.
Commodities and Global Volatility
Oil prices fell sharply—down 10–11%—as OPEC+ ramped up output and Middle East tensions eased. Gold and copper, however, soared on safe-haven demand and industrial optimism. These global swings, coupled with Trump’s tariff brinkmanship, have kept markets on edge.
Forecast: Uncertain Times Ahead
With the U.S. tariff pause nearing its end and geopolitical risks still simmering, Thailand’s economic trajectory remains uncertain. Policymakers face a delicate balancing act: navigating external shocks while restoring domestic confidence.