FPO forecasts stronger baht at 31.8 per US dollar in 2026 amid weak dollar and capital inflows

Varothai Kosolpisitkul, International Economic Adviser at the Fiscal Policy Office (FPO), revealed the key assumptions underpinning Thailand’s latest economic projections, particularly the outlook for the baht–US dollar exchange rate and the nominal effective exchange rate (NEER), both of which are expected to appreciate steadily through 2025 and 2026.

The FPO forecasts the baht to average 32.9 per US dollar in 2025, within a range of 32.4-33.4, marking a 6.8% appreciation from the previous year. This represents a slight upward revision from the July 2025 forecast.

For 2026, the baht is projected to strengthen further, averaging 31.8 per US dollar, within a range of 31.3–32.3, up 3.2% from 2025.

Meanwhile, the NEER — measuring the baht’s value against the currencies of Thailand’s 15 major trading partners — is expected to average 118.8 points in 2025, up 6.3% year-on-year. In 2026, however, it may dip slightly to 118.5 points, a 0.3% decline, due to the strengthening of other major currencies such as the yen and euro.

Four key drivers of a stronger baht

1. Weaker US dollar: The continuing depreciation of the US dollar remains the primary factor supporting baht strength, with the trend expected to persist into 2026.
2. Consistent current account surplus: Thailand’s stable trade position continues to provide a firm economic foundation.
3. Capital inflows: Rising investor confidence, particularly in 2026, is expected to attract more foreign investment into Thai bonds and equities.
4. Rising global gold prices: The steady increase in gold prices has also supported the baht’s appreciation.

“Thailand’s solid fundamentals — particularly a robust trade sector, persistent current account surplus, and steady capital inflows — reflect long-term investor confidence in the Thai economy,” Varothai said.

Despite the positive outlook, the FPO noted several short-term uncertainties. Chief among them is the US Federal Reserve’s monetary policy. If the Fed cuts interest rates less than markets expect, the dollar could regain strength temporarily, putting short-term pressure on the baht.

Additionally, volatile capital flows, geopolitical tensions, and global trade disputes could trigger fluctuations in financial markets. Global oil and commodity price volatility may also affect Thailand’s current account balance.

The FPO added that while the baht’s overall appreciation trend remains intact, external factors — including the global economy, energy market conditions, and major currency movements — will continue to influence Thailand’s export competitiveness and foreign tourism recovery.