Press Release on the Economic and Monetary Conditions for July 2026
BOT Press Release No. 34/2026 | 31 Aug 2026
- The Thai economy in July expanded from the previous month, supported by the ongoing global technology and artificial intelligence (AI) cycle, the easing of disruptions from the Middle East conflict, and government stimulus measures.
o Merchandise exports continued to expand, driven primarily by electronics products. Meanwhile, private investment softened following strong growth in the previous period.
o Tourism receipts and foreign tourist arrivals increased, mainly supported by the gradual recovery in flight capacity, particularly on long-haul routes.
o Private consumption increased, driven by higher spending on services, supported by government measures and improved domestic tourism activity during the extended holiday period.
o Manufacturing and service activities improved, in line with higher merchandise exports and tourism activity.
o Government expenditure expanded, driven by higher disbursements by both the central government and state-owned enterprises. - Headline inflation declined, mainly due to lower energy prices, while core inflation increased slightly, reflecting the gradual pass-through of higher costs to consumer prices.
- Key issues to monitor: (1) the sustainability of the global technology and artificial intelligence cycle, (2) developments in geopolitical conflicts and international trade protectionist policies, (3) the recovery of the tourism sector, (4) the impact of government measures, and (5) El Niño developments.
Details of the economic conditions are as follows:
The Thai economy in July expanded from the previous month, supported by the continued momentum of the global technology and artificial intelligence (AI) cycle. Merchandise exports increased further, particularly in the electronics category, contributing to improved manufacturing activity. Nevertheless, export growth continued to rely heavily on imported inputs. Private investment softened, mainly in the machinery and equipment category, following strong expansion in the previous period. Tourism-related activities continued to improve, with both tourism receipts and foreign tourist arrivals increasing, particularly from long-haul markets. The improvement was supported by the gradual recovery in flight capacity as the situation in the Middle East continued to ease, together with stronger travel demand during the summer school holiday. As a result, service activities, especially in the hotel and restaurants, expanded in line with improving tourism. Private consumption increased, driven by higher spending in services, particularly at restaurants, supported by government measures and improved domestic tourism during the extended holiday period. Government expenditure also expanded, reflecting higher disbursements by both the central government and state-owned enterprises.
On the economic stability front, headline inflation declined from the previous month, mainly due to a decrease in domestic retail oil prices, in line with lower global crude oil prices and reduced contributions to the Oil Fuel Fund. Meanwhile, core inflation increased slightly, reflecting the gradual pass-through of higher costs, particularly for prepared food and cooking ingredients. The current account deficit narrowed from the previous month, primarily due to a smaller trade deficit as imports of gold and fuel declined. Overall labor market conditions remained stable.
