Bank of Thailand upgrades 2026 GDP growth forecast to 2.3%

Thailand's economic growth forecast for 2026 has been upgraded by the Bank of Thailand, which now anticipates a 2.3% expansion, up from the previous projection of 1.5%. This upward revision is attributed to robust export performance, effective government stimulus measures, and a reduction in geopolitical tensions in the Middle East.

The central bank's Monetary Policy Committee (MPC) also voted unanimously to keep the policy interest rate unchanged at 1%, a move that aligned with market expectations. However, the MPC has lowered the GDP growth forecast for 2027 to 1.8% from 2%, citing base effects. MPC secretary Don Nakornthab noted that while economic expansion is stronger than previously assessed, growth remains low and uneven.

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Thailand's economic expansion is projected to be stronger than previously assessed, but growth remains low and uneven.

Growth has been bolstered by merchandise exports and private investment linked to the technology and artificial intelligence sectors. Government initiatives to mitigate the energy crisis and a less severe-than-expected impact from the Middle East conflict have also supported the economy. Businesses have shown adaptability, finding new raw material sources and adjusting transport routes, while crude oil prices have fallen below the central bank's average forecast.

Despite these positive indicators, challenges persist. Small and medium-sized enterprises continue to face adaptation limitations and intense competition. Most households are experiencing pressure from decelerating income growth and rising living costs, which are expected to dampen private consumption once government relief measures conclude. Inflation is projected to rise due to supply-side factors before eventually falling, with headline inflation expected to peak at 4.5% in the fourth quarter of this year due to energy prices and El Niño effects.

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The Dubai crude oil price has dropped below the central bank's average of US$100 for the year, while businesses have identified new sources of raw materials and adjusted their transport routes.