Press Release on the Economic and Monetary Conditions for May 2026
BOT Press Release No. 26/2026 | 30 Jun 2026
- The Thai economy in May remained broadly stable compared to the previous month.
o On the external front, tourism receipts and foreign tourist arrivals overall increased, supported by a recovery in long-haul markets and an increase in tourist arrivals from China and Malaysia due to their long holiday period. However, other short-haul tourists declined due to weaker demand and reduced flights. Merchandise exports excluding gold decreased, mainly due to lower exports of electronics and jewelry following earlier acceleration in the previous period.
o Domestic demand improved slightly, supported by increases in private consumption and private investment, particularly in the automotive sector. However, consumption and investment in other categories remained relatively stable.
o On the supply side, Manufacturing production declined in line with merchandise exports, while the services sector remained broadly stable. - Headline inflation remained elevated but broadly stable. Energy prices declined slightly, while core inflation increased marginally.
- Key issues to monitor: 1) The impact of elevated cost of living and production costs on households and businesses 2) geopolitical risks and U.S. trade policy, 3) the impact of government measures, and 4) El Niño developments
Details of the economic conditions are as follows:
The Thai economy in May remained broadly stable compared to the previous month. Tourism receipts increased overall, in line with higher foreign tourist arrivals, as supported by a recovery in long-haul markets as well as increased arrivals from China and Malaysia due to their long holiday periods. However, arrivals from other short-haul markets declined due to weaker demand and reduced flight services amid elevated energy costs. Merchandise exports excluding gold declined, mainly due to lower exports in electronics and jewelry after having accelerated in the previous period. Domestic demand improved slightly, supported by higher private consumption and investment, particularly in the electric vehicle sales, partly reflecting a shift toward the electric vehicle usage amid elevated domestic fuel prices. However, consumption and investment in other categories remained broadly stable. Government expenditure expanded from the same period last year, driven by both current and capital expenditures of the central government. On the supply side, economic activity remained broadly stable. Manufacturing production declined in line with weaker merchandise exports, while the services sector remained broadly unchanged.
On the economic stability front, headline inflation remained elevated but stable from the previous month. The energy component declined slightly in line with global crude oil prices but remains high due to continued collections to improve the position of the Oil Fuel Fund. Raw food prices also declined, mainly due to lower prices of meat and eggs. Meanwhile, core inflation increased slightly, as businesses continue to gradually pass-through higher input costs to some product categories. However, there are limited signs of persistent price pressures and broad-based price increases. The current account deficit narrowed from the previous month, mainly due to a smaller trade deficit following lower energy imports. Overall labor market conditions remained stable.
