The Thai economy is projected to expand by 2.3 and 1.8 percent in 2026 and 2027, respectively. Growth has been stronger than previously anticipated, supported by merchandise exports and private investment associated with the technology and AI cycle, government measures to alleviate the impact of the energy crisis, as well as an improvement in the situation surrounding the Middle East conflict. At the same time, the realized impact of the conflict on the manufacturing and tourism sectors has been less severe than previously assessed, with large businesses demonstrating greater adaptability than anticipated. Nevertheless, the overall economic expansion is projected to remain low and uneven. SMEs continue to face limitations in adaptation and are constrained by intense competition. Meanwhile, most households remain under pressure from decelerating income growth and rising living costs, which will weigh on private consumption once government relief measures phase out.

Headline inflation in 2026 and 2027 remains in line with the previous assessment, averaging 2.8 and 1.4 percent, respectively. Inflation for the remainder of 2026 is expected to exceed the target range due to pass-through of energy and production costs, before declining in 2027 given the dissipation of supply-side pressures and the effect of a high base in 2026. Core inflation is projected to average 1.5 and 1.4 percent in 2026 and 2027, respectively, in line with previous estimation. Medium-term inflation expectations remain anchored within the target range. Despite improving developments surrounding the Middle East conflict, cost pass-through by firms warrants close monitoring amid elevated costs, as well as medium-term inflation expectations.

(Forecast as of 24 Jun 2026)