Details of the economic conditions are as follows:

The Thai economy in June remained broadly stable from the previous month. Domestic demand improved somewhat, as private consumption was supported by higher spending on consumer goods following government measures, while electric vehicle (EV) sales increased amid elevated fuel prices and growing consumer preferences for EVs. Private investment also increased slightly, led by machinery and equipment, consistent with higher merchandise exports of technology-related products supported by the global electronics cycle and data center investment. However, manufacturing production declined, mainly due to lower petroleum production following partial refinery maintenance shutdowns and lower production of non-electric vehicles. Tourism-related activities softened, as both tourism receipts and foreign tourist arrivals decreased, particularly from short-haul markets, due to weaker demand and reduced flight services amid elevated energy costs. As a result, service activities, especially in hotels and restaurants, softened. Meanwhile, government expenditure expanded from the same period last year, driven by both current and capital expenditures of the central government, although state-owned enterprises capital expenditure contracted.

On the economic stability front, headline inflation declined from the previous month, mainly due to lower energy prices in line with global crude oil prices. Core inflation continued to increase, reflecting gradual cost pass-through to personal care products and prepared food. The current account deficit narrowed from the previous month, driven by an improvement in services, income, and transfers following the end of the seasonal profit and dividend repatriation period, while the trade deficit remained broadly unchanged. Overall labor market conditions remained stable.

The Thai economy slowed in Q2/2026 from the previous quarter, reflecting the impact of higher energy prices and travel disruptions associated with the conflict in the Middle East. Nevertheless, the economy continued to receive support from the technology-related exports, in line with the global electronics upcycle, while government measures helped mitigate part of the adverse impact. The slowdown in economic activity was evident in weaker tourism activity. Foreign tourist arrivals declined, particularly from the Middle East, Europe, and several short-haul markets, reflecting weaker demand and reduced flight services amid elevated energy costs. Consequently, service-sector activity moderated, especially in hotels and restaurants. Private consumption also declined as higher living costs weighed on household spending, although government measures introduced in June provided some support. Consumption softened across most categories, particularly spending on hotels and restaurants. Spending on consumer goods and fuel consumption also declined following front-loaded purchases in the previous quarter, while electric vehicle sales edged down after the expiration of the EV 3.0 scheme.

On the supply side, manufacturing production declined. This was mainly due to lower petroleum production following partial refinery maintenance shutdowns, weaker chemical production from softer demand amid higher raw material costs, and lower electrical appliance production consistent with softer external demand. Nevertheless, merchandise exports and private investment continued to expand, supported by technology-related products, in line with the global electronics upcycle and demand for data center investment. Imports rose significantly, particularly fuel imports, reflecting crude oil imports for domestic stockpiling. Imports of raw materials also increased, especially electronic parts and electrical appliances, consistent with the expansion in technology-related exports. Meanwhile, public expenditure expanded from the same period last year, supported by increases in both current and capital expenditures of the central government.

On the economic stability front, headline inflation increased from the previous quarter, mainly due to higher energy prices in line with rising global crude oil prices. Core inflation also increased, driven primarily by prepared food prices, reflecting the pass-through of higher business costs. The current account registered a deficit, reflecting a trade deficit largely due to higher energy import values, together with a deficit in services, income, and transfers following the seasonal profit and dividend repatriation period in May. Overall labor market conditions improved slightly from the previous quarter. Nevertheless, employment in the manufacturing sector warrants close monitoring amid softer production activities from intense competitive pressures and rising production costs.

Press Release Documents

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