Exports, FDI lift Thailand’s 2026 growth forecast to 2.5%
Exports are forecast to grow 12.5% and private investment 9%, but the Finance Ministry warns of energy prices, US tariffs and drought
- Thailand's Finance Ministry has raised its 2026 economic growth forecast to 2.5%, a significant increase from the 1.6% projected in April.
- The upgrade is primarily driven by a stronger-than-expected export performance, with the forecast for merchandise export growth more than doubling to 12.5%.
- A surge in investment is another key factor, with Foreign Direct Investment (FDI) growing by 68.3% in the first half of the year and the private investment growth forecast rising to 9%.
Thailand’s Finance Ministry has raised its 2026 economic growth forecast to 2.5% from the 1.6% projected in April, after exports, private investment and household consumption performed more strongly than expected.
The ministry now expects gross domestic product to expand within a range of 2.0% to 3.0%, according to Vinit Visessuvanapoom, director-general of the Fiscal Policy Office and a ministry spokesperson.
The new projection is slightly more optimistic than the Bank of Thailand’s June forecast of 2.3%. The central bank said at the time that the economy was improving but growth remained low and uneven.
Exports and investment strengthen
The Finance Ministry raised its forecast for merchandise export growth in US dollar terms to 12.5%, more than double the 6.2% projected in April.
Thai exports grew by an average of 10.9% during the first five months of 2026, supported by stronger demand among major trading partners and the recovery of industries linked to the global economic cycle.
Imports are forecast to increase by 19%, partly because companies are bringing in more machinery, equipment and other capital goods to expand production. Higher imported energy prices during the second quarter also contributed to the increase.
The ministry regards the rise in capital-goods imports as a sign of future investment and production rather than solely as a deterioration in the trade balance.
Private investment is forecast to grow by 9%, compared with the 3.2% projected in April. The ministry attributed the revision to continuing investment in machinery and equipment, as well as projects in targeted advanced industries known as the New S-Curve sectors.
Thailand FastPass, a mechanism intended to speed up investment approvals and address regulatory obstacles, has also helped strengthen investor confidence, the ministry said.
Foreign investment totalled 187 billion baht in the first half of 2026, an increase of 68.3% from the corresponding period last year.
Private consumption is expected to expand by 2.7%, supported in part by government measures intended to cushion households from higher energy and living costs.
Budget stays on course
Government investment is forecast to grow by 3.2%, while government consumption is expected to increase by 1.5%.
Preparation of the fiscal 2027 budget remains on schedule, reducing earlier concerns that delayed spending could interrupt economic activity.
The ministry expects continued investment in large infrastructure projects to improve the country’s competitiveness and encourage businesses to commit additional capital alongside public spending.
The government has described 2026 as a “year of investment”, with FastPass approvals, infrastructure development, regulatory facilitation and business matching through the Board of Investment forming part of its strategy.
Vinit said Thailand’s infrastructure and logistics network, together with what the government calls a policy of “active neutrality”, could make the country more attractive to companies seeking alternative production bases amid geopolitical tensions.
The government has separately set a longer-term goal of raising investment from about 22%–23% of GDP to 30%.
Inflation forecast at 2%
The Finance Ministry expects headline inflation to average 2% in 2026, within a projected range of 1.5% to 2.5%.
Its assumption for the average Dubai crude price has been lowered to US$82 a barrel from US$91, although renewed conflict in the Middle East could force energy prices higher again.
Thailand is forecast to record a current-account deficit of about US$500 million, equivalent to 0.1% of GDP. The ministry attributed the small deficit largely to the country’s high energy trade shortfall during the first half of the year.
Three risks cloud stronger outlook
Despite the upgrade, the ministry identified three risks that could weaken growth:
- Middle East tensions: Further escalation could drive global energy prices higher, increasing production, transport and household costs.
- International trade barriers: The ministry is monitoring US trade measures and other protectionist policies that could affect Thai exporters. New US duties of 10% or 12.5% on goods from 60 trading partners took effect on July 24 as a temporary 10% global tariff expired. Thailand was placed in the 12.5% group.
- Severe El Niño conditions: The ministry warned that El Niño could intensify late in the year, bringing unusually high temperatures and drought that could raise agricultural and food-production costs. The severity of the phenomenon remains a forecast risk rather than a confirmed outcome.
