SCB

Thailand’s economy is projected to grow only 1.5% in 2026, the lowest in three decades, due to external pressures from trade wars and competition, alongside domestic structural issues. Urgent reforms are needed to boost resilience and economic potential amid rising uncertainties.

The MPC unanimously cut the policy rate from 1.50% to 1.25% to address economic slowdown and debt burdens. Future adjustments will consider inflation and stability, with concerns over deflation risks, credit contraction, and the appreciating Thai baht affecting financial conditions.

The global economy is slowing, with a projected growth of 2.3% in 2025-2026, affected by trade tensions and uncertainty. Thailand’s growth may drop to 1.4% in 2026, influenced by weak exports, investment delays, and rising geopolitical risks.

Recent severe flooding in Hat Yai highlights Thailand’s unpreparedness for climate change, exacerbating flooding and droughts. With increased rainfall extremes, rising sea levels, and heightened water demands, urgent investments in water management and infrastructure are crucial to safeguard communities and the economy.

In October 2025, Thailand’s merchandise exports valued at USD 28.8 billion grew 5.7% YOY, below expectations. Electronics and US shipments drove growth, while gold exports sharply declined. Imports surged, causing a significant trade deficit of USD 3.4 billion.

The U.S. has imposed tariffs up to 50% on appliances with steel components, impacting Thailand’s exports. Expected declines in Thai electrical appliance exports are projected at -1.9% for 2025 and -2.1% for 2026, urging businesses to adjust strategies and diversify markets.

In September 2025, Thailand’s merchandise exports soared to USD 30.97 billion, up 19% YOY, driven by electronics and gold. Imports also rose significantly, leading to a trade surplus of USD 1.28 billion. However, forecasts indicate potential challenges ahead for 2026.

Thailand’s GDP is projected to grow 1.8% in 2025 and 1.5% in 2026, facing domestic and global challenges, including trade tensions and a strong baht. The government should focus on stabilizing, stimulating the economy, and structural reforms to attract foreign investment.