BOT forecasts 1.6% growth in 2026 amid export slump and strong baht pressure
Bank of Thailand projects just 1.6% growth in 2026 as exports slow and the baht strengthens, despite new state stimulus measures to boost spending.
The Bank of Thailand (BOT) has warned that the Thai economy is set to expand by only 1.6% in 2026, following a projected 2.2% growth in 2025, as exports slow and the strong baht weighs on tourism.
The forecast, presented at the Monetary Policy Forum, reflected rising risks from US trade tariffs and weakening global demand. While Thailand’s GDP grew 3% in the first half of 2025, the BOT expects sharp deceleration in the second half — 1.5% growth in Q3 and 1.3% in Q4.
According to Pranee Sutthasri, Senior Director of the Macroeconomic Department, the government’s stimulus packages — Khon La Khrueng Plus (Let’s Go Halves Plus) and Tiew Dee Mee Kuen (Travel and Payback) — will likely add 0.2–0.3% to GDP in Q4 by boosting consumer sentiment and domestic tourism.
The BOT estimates 33 million foreign visitors in 2025, generating 1.4 trillion baht, and expects the number to rise to 35 million in 2026, including 6 million Chinese tourists, with tourism revenue reaching 1.5 trillion baht.
However, travel operators remain concerned that a strong baht could undermine competitiveness and dampen spending.
Surach Tanboon, Senior Director of the Monetary Policy Department, said headline inflation is forecast at 0.0% in 2025, 0.5% in 2026, and 1% in 2027, returning to the target range of 1–3% by 2027.
He insisted that Thailand is not in deflation, noting that low inflation mainly stems from energy and fresh food prices, while most goods have not seen broad-based declines. Cheaper Chinese imports and domestic competition continue to keep prices low.
Surach stressed the need for a policy mix combining monetary, exchange rate, and financial measures to sustain growth and stability. Monetary policy should remain accommodative, while maintaining a stable baht in line with fundamentals.
Loan contraction persists, particularly among large corporates and risk-averse banks lending to SMEs and low-income households. The BOT plans targeted actions such as debt restructuring, liquidity support, and an AMC for bad loans.
“Cutting rates alone is not enough,” Surach said. “We must also strengthen SME capacity, as the core issue lies in purchasing power and competitiveness, not just interest burdens.”
He added that monetary policy transmission typically takes three to four quarters, meaning future adjustments must be carefully timed.
