Bank of Thailand lowers 2026 growth outlook to 1.3 percent
Thailand cut its 2026 growth forecast to 1.3 percent as the Iran war impacts tourism and energy costs. Officials warned of severe pressure on national growth.
Thailand is facing a significant downward revision in its economic outlook as regional instability involving Iran threatens to derail growth. Assistant Governor Chayawadee Chai-anant of the central bank warned that the Southeast Asian nation is particularly vulnerable due to its heavy reliance on energy imports and the critical role of international tourism.
The ongoing conflict involving the United States and Israel with Iran has already begun to impact global commodity markets, specifically driving volatility in Brent Crude Oil. This surge in energy costs is complicating the domestic economic recovery and putting pressure on the USD/THB exchange rate.
\"It's going to be the downward trend for a lot of things,\" Chai-anant said on the sidelines of the IMF-World Bank spring meetings in Washington.
The tourism sector, a primary engine for the Thai economy, is experiencing a notable decline. Visitors from Gulf countries dropped to nearly zero in March following airport closures in the Middle East. Furthermore, travelers from Malaysia are visiting in fewer numbers as high fuel prices deter road travel across the border.
In response to these challenges, the central bank has lowered its baseline GDP growth forecast for 2026 to 1.3%, a decrease from the 1.9% projected in December. This forecast assumes the conflict concludes within the second half of the year. Inflation is now expected to reach 3.5% under this scenario.
\"In terms of the worst-case scenarios, there's no limits to it. It's that bad,\" she said.
While policymakers previously anticipated a current account surplus of approximately $12 billion for the year, that figure is now subject to downward revision and could potentially turn negative. Despite these pressures, the central bank noted that capital outflows from debt and equity markets seen in February and March have stabilized and returned to positive territory in April.
\"We can actually showcase that Asian countries are having very strong fundamentals, and are agile in terms of adaptation,\" she said.
