NESDC flags four major risk signals for Thailand’s 2026 economy
Thailand’s economic growth in 2026 is projected at just 1.2-2.2%, with the NESDC warning of four key risks: US reciprocal tariffs, global slowdown, high private debt and pre-election uncertainty.
The National Economic and Social Development Council (NESDC) has released its latest economic assessment, highlighting four major risk signals that could weigh on Thailand’s economic performance in 2026. The council noted that the economy is likely to lose momentum, in line with an expected slowdown in exports after exceptionally high growth last year.
The outlook also reflects the global economic and trade slowdown amid rising US tariff measures, which are expected to continue limiting Thailand’s industrial production and private investment. Meanwhile, high levels of private-sector debt, combined with tighter financial conditions, remain a significant constraint on domestic demand.
Even so, the NESDC says Thailand’s 2026 economy will still be supported by private consumption, private investment, government spending, a stronger recovery in tourism and related services, and improving agricultural output.
Thailand’s overall economic growth for 2026 is projected at 1.2-2.2%, with a midpoint of 1.7%, down from 2% expected in 2025. Inflation is forecast at 0.0-1.0%, while the current account is expected to post a 2.4% surplus of GDP.
Four economic risks for Thailand in 2026
1. US reciprocal tariffs and other trade barriers
The United States has imposed a 19% tariff on imports from Thailand, effective 7 August 2025. NESDC expects significant impacts through:
(1) Direct pressure on Thai exports, which are expected to decline in 2026—especially rubber products (5.46% of US-bound exports), gems and jewellery (2.73%), electrical appliances (2.62%), and semiconductor devices (1.5%).
(2) Indirect effects via the supply chains of countries targeted by US measures, especially China, potentially reducing Thai exports of intermediate goods such as cars and parts, plastic pellets, and wood products.
(3) Higher risk of stricter US scrutiny on imports suspected of transshipment or rules-of-origin evasion, which could be subject to 40% tariffs. High-risk products include solar panels, printed circuit boards, and wheels and automotive accessories.
(4) Domestic production pressure due to rising imports following tariff negotiations with the US—especially agricultural products—and sustained high imports from China in categories such as electronics, machinery, vehicles, and consumer goods.
2. Slowing global economy and global trade
NESDC warns of several uncertainties:
(1) Prolonged global trade tensions and rising protectionism, which could undermine global investment confidence and disrupt supply chains, especially in key sectors such as rare earth minerals, steel, aluminium, vehicles, and parts.
(2) The shifting direction of major central banks’ monetary policies.
(3) A downward electronics cycle amid high competition and the risk of new US tariffs on tech-related goods, combined with China’s controls on rare earth exports, potentially weakening Thailand’s investment and export outlook.
(4) Geopolitical conflicts, with inflation risks linked to higher global commodity and energy prices.
(5) Financial market volatility, driven by re-pricing of tech stocks—particularly in the US, where AI-related investments have pushed valuations to record highs. A correction could slow consumption and reduce household wealth, affecting economic recovery.
3. High private-sector debt
Private debt remains a key barrier to domestic demand recovery. Household debt reached 86.8% of GDP in Q2 2025 (down from 89.7% a year earlier), yet remains higher than 82.6% in Q2 2019, before COVID-19.
Loan quality has also deteriorated, especially personal consumption loans, where both NPLs and SMLs continue to rise. As a result, banks remain cautious in lending to high-risk borrowers, particularly SMEs and vulnerable low-income households, limiting liquidity and putting pressure on domestic demand.
4. Economic and political uncertainty before and after the election
Consumer and investor confidence may be affected, as seen in volatility in the Business Sentiment Index (BSI) during government transition periods. Political uncertainty may also delay the formation of a new government, potentially causing delays in the FY2027 budget process, which could affect fiscal planning and economic momentum.
The NESDC concludes that these risks must be closely monitored as they will determine the strength and resilience of Thailand’s economic recovery in 2026.
