‘Middle East’ clashes intensify; fears tourists may plunge 80%, dragging Thai GDP down

Sorathep Rojpotjanaruch, president of the Restaurant Business Club and Honorary Advisor to the Thai Hostel Association, told Thansettakij that if tensions between the United States, Israel and Iran persist, Thailand’s economy could be hit in a chain reaction—from Thai workers overseas and tourism to energy, the cost of living, exports and the investment climate.

He said at least two short-term impacts are already clear.

The first concerns Thai workers in the Middle East.

At present, more than 90,000 Thais work across the region in multiple countries, not only Iran or Israel.

If the situation worsens, it could affect safety, income and remittances, directly impacting Thai households.

The second is tourism—especially flights from the Middle East that have begun to be cancelled in large numbers, with clear spillover from Dubai’s role as an aviation hub.

This would immediately slow the Middle East tourist market, which is one of Thailand’s key markets.

He said the Middle East market matters because travellers typically visit Thailand during the Middle East high season, which runs from June to September.

If the situation does not ease, tourist numbers could drop sharply.

He estimated Israel’s market could fall by about 30%, while tourists from Iran and other Middle Eastern countries could disappear by as much as 80%.

Over the medium to long term, he said if the conflict persists the impact will extend to energy—especially oil, fuel and LPG—which are likely to rise.

That would increase transport costs nationwide.

Agricultural goods and consumer products rely heavily on oil-based logistics; when costs rise, inflation will accelerate and prices will gradually increase.

Restaurants, in particular, would be hit directly as ingredient costs and transport costs rise at the same time.

Electricity costs may also trend higher, as Thailand still relies partly on natural gas and fossil fuels for power generation.

On trade, he said if the situation drags on beyond two months, Thailand could lose significant export value to the Middle East.

If trade slows, goods will build up in inventory, immediately affecting exporters. The baht could also become more volatile, affecting the cost of importing raw materials and exporting to the region.

In uncertain conditions, he said gold prices tend to rise as a safe haven, while digital assets such as Bitcoin may become more volatile and weaken, as the Middle East is one of the regions with relatively high levels of crypto investment.

At the same time, geopolitical risk could cause foreign investors to delay investment decisions while assessing the global economic outlook, affecting capital inflows into Thailand.

He added that if oil prices remain elevated for three to six months, Thailand’s GDP will be affected. Higher global oil prices will raise airline costs, pushing up airfares into Thailand.

Tourists may delay travel, especially during the year-end high season and major festivals. If tourism slows significantly, Thailand’s GDP could be hit by around 0.5–0.8%.

Meanwhile, inflation driven by energy and transport costs would further weaken domestic purchasing power that is already slowing.

Sorathep said he understood the government has set up an economic and security “war room” and assessed Thailand’s oil reserves at about 60–61 days.

However, he said Thailand imports oil from Iran at roughly 20% of total consumption. If shipping routes are disrupted, the government should urgently negotiate to secure oil from other producer countries that are increasing output, to maintain domestic energy stability.

“We must quickly diversify energy supply risks, otherwise the impact will spread from energy costs to the cost of living and the entire economy,” he said.