World Bank lifts Thailand’s 2026 growth forecast to 1.8%, still lowest in ASEAN
The report says higher trade barriers and policy uncertainty will continue to weigh on exports and investment in 2026, with a stronger global trade and investment cycle expected to support a recovery in 2027.
- The World Bank has raised its 2026 GDP growth forecast for Thailand by 0.1 percentage point to 1.8%.
- Despite the upward revision, Thailand's 1.8% growth projection is the lowest among all major ASEAN countries mentioned in the report.
- Other ASEAN nations are forecast to grow significantly faster in 2026, with projections such as 6.3% for Vietnam, 5.3% for the Philippines, and 5.0% for Indonesia.
- The report suggests that the delayed impact of higher tariffs will act as a drag on Thailand's economic activity and exports in 2026.
The global economy is heading into a decade of weaker-than-expected performance, buffeted by repeated shocks ranging from trade tensions to uncertainty over global economic policy.
Slower growth is constraining job creation just as 1.2 billion young people in emerging market and developing economies reach working age over the next 10 years, while high public debt leaves many countries more vulnerable to future crises.
The challenge, therefore, is not only to manage immediate risks but also to lift growth, raise productivity, create jobs and widen opportunity.
While last year’s front-loading of trade ahead of tariffs and rising investment tied to artificial intelligence helped support activity, those tailwinds appear insufficient for 2026.
Thailand’s GDP forecast edges up, but remains at the bottom of ASEAN
In its Global Economic Prospects report, the World Bank forecasts Thailand’s economy will expand by 1.8% in 2026, an upward revision of 0.1 percentage point from its June 2025 projection.
It expects growth of 2.5% in 2027, while estimating 2.0% growth in 2025.
Despite the slight upgrade, Thailand’s growth outlook remains the weakest among major ASEAN peers cited in the report.
For 2026, the World Bank forecasts Viet Nam 6.3%, the Philippines 5.3%, Indonesia 5.0%, Cambodia 4.3% (down 0.2 percentage point from the June 2025 projection), Malaysia 4.1%, Lao PDR 4.0%, and Myanmar 3.0%.
Higher tariffs to weigh on activity; trade recovery seen in 2027
The report says East Asia and Pacific activity is expected to moderate in 2026 before picking up in 2027, reflecting the unwinding of earlier front-loading and stronger investment in some countries due to domestic policy support.
It expects Indonesia to be supported by fiscal stimulus and state-led investment, while planned structural reforms in the Philippines may boost investment and productivity, though governance concerns remain.
For Thailand and Viet Nam, it flags the delayed impact of higher tariffs as a drag on activity and exports in 2026, with a rebound anticipated in 2027 as global trade and investment recover.
Trade diversion and supply-chain shifts may reshape winners and losers.
The World Bank expects higher trade barriers and the unwinding of earlier front-loading to slow export growth across the region, though it says the impact may be smaller than previously expected, partly because of increased Chinese shipments to non-US markets and AI-driven demand for semiconductors.
It adds that bilateral trade agreements with the United States could change regional trade patterns depending on tariff differences across countries and sectors, while trade diversion and production relocation, observed after the 2018 increases in US tariffs, could reconfigure supply chains and allow some countries to benefit through export-led development and job creation.
Inflation impact still unclear; downside risks dominate
On inflation, the report says the effects of higher trade barriers are ambiguous: tariff-related supply-chain disruptions can raise costs and prices, but trade rerouting to lower-tariff markets can also create deflationary pressure in those destinations.
It notes that major East Asia and Pacific central banks are well placed to respond to domestic conditions following recent declines in inflation.
Overall risks for the region are tilted to the downside, including the possibility of renewed trade tensions, tighter global financial conditions, slower-than-expected growth in China, political uncertainty and social unrest, and more frequent natural disasters.
On the upside, the World Bank says firms’ ability to adapt to higher trade barriers and productivity gains from AI-related investment and adoption could support stronger outcomes.
