Thailand’s economy is projected to grow just between 1.6 and 2.0 percent in 2026, its leading private business advisory group confirmed, underlining persistent economic pressure from global trade tensions, a strong currency and domestic political turmoil that cast a shadow over Southeast Asia’s second largest economy. This muted outlook comes as exports, a key engine of growth, are also expected to weaken or shrink this year, leaving businesses and households bracing for a slow year ahead.
The numbers signal a stark contrast to more upbeat regional neighbours and heighten concerns about Thailand’s long-term competitiveness. With general elections underway and U.S. trade policy uncertainties still unfolding, 2026 could prove challenging for policymakers and businesses alike.
Slow Growth in 2026 Despite Earlier Forecast
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), a consortium of business associations, reiterated that Thailand is likely to see its gross domestic product expand between 1.6 and 2.0 percent in 2026.
This outlook remains unchanged from its previous forecast, suggesting that key economic indicators have not improved significantly since late 2025. The forecast also comes hot on the heels of the government and central bank setting similarly conservative targets, reflecting a broader consensus of subdued growth.
Officials have cited several factors dampening growth, including an emerging decline in exports, household debt burdens, and the impact of U.S. tariffs. Meanwhile, the Thai baht’s persistent strength has eroded export competitiveness, making goods and services pricier overseas, especially in crucial markets like the United States and China.
Export Outlook Weakens After Strong 2025
Exports are expected to contract by between 0.5 and 1.5 percent in 2026 after a robust 12.9 percent surge in 2025.
That strong performance last year was driven largely by pre-emptive shipments ahead of U.S. tariff hikes. However, with the tariff impact now clearing inventories and global demand slowing, export momentum is forecast to reverse. Recent trade data show a significant rise in export volumes in December 2025, but this is already expected to ease during the year ahead.
Experts also warn that uncertainty over U.S. tariff policy on transshipments and broader global trade tensions could further weigh on shipments, especially for industries like electronics and automotive parts.
Currency and Household Pressures Add to Economic Drag
Another major drag on growth is the strength of the Thai baht, which appreciated sharply in 2025 and has continued to gain ground in early 2026.
A strong currency often signals investor confidence, but in Thailand’s case it has made exports and tourism services less competitive internationally, undermining two pillars of the economy. In response, the Bank of Thailand introduced new measures to curb speculative activity in gold trading that has contributed to the baht’s strength.
Household debt in Thailand remains high relative to income, limiting consumer spending and putting further pressure on domestic demand in a year where export performance is expected to falter. Many small and medium enterprises have also reported tighter liquidity and cautious investment as uncertainty mounts.
Political Uncertainty Ahead of Elections and Budget Delays
Political developments are playing a significant role in economic sentiment. Thailand is heading into a general election scheduled for February 8, 2026, a highly watched event after years of political fragmentation and shifts in government leadership.
Business leaders have expressed concern that delays in passing the budget for fiscal year 2027 due to the political transition could stall public investment and economic stimulus programs. This adds to the risk profile for 2026, as delayed policy implementation often leads to slower growth outcomes.
At the same time, political gridlock has heightened calls among industry groups for structural reforms to boost confidence and competitiveness, including faster negotiation of free trade agreements and improvements in productivity and innovation.
Regional Context and Structural Challenges
Thailand’s growth forecast for 2026 places it among the slower-growing economies in Southeast Asia, especially when compared to robust projections in neighbouring countries like India, which is expected to grow around 6.8 to 7.2 percent in its upcoming fiscal year.
Analysts have pointed out that Thailand’s long-standing structural challenges, such as declining industrial competitiveness, an ageing workforce, and low private investment, have been magnified in recent years. These issues predate 2026 and continue to suppress potential growth gains.
Adding to that are concerns about decreasing regional tourism competitiveness post-pandemic, stiff competition from other ASEAN destinations, and environmental factors such as climate events that can disrupt supply chains.
Side-by-Side: Key Forecasts for Thailand’s 2026 Economy
| Indicator | Forecast / Expectation |
|---|---|
| GDP Growth | 1.6 to 2.0 percent (JSCCIB) |
| Exports | Contracting by up to 1.5 percent |
| Currency Impact | Baht remains strong |
| Household Debt | Persistently high |
| Regional Growth Benchmark | Higher in neighbouring economies |
What This Means for Thai Households and Businesses
For everyday Thais, slower GDP growth may translate to sluggish job creation and restrained wage increases, particularly in sectors tied to exports and manufacturing. Businesses reliant on trade and foreign demand may face tougher operating conditions, with smaller companies the most vulnerable.
At the same time, the government’s fiscal and monetary response will be critical. Fiscal support and reforms aimed at boosting productivity and diversifying trade partners could help cushion economic headwinds and build resilience against future downturns.
Despite these challenges, there are pockets of optimism in sectors such as digital services, renewable energy, and automotive supply chains that could attract investment if supportive policies are enacted. Strategic engagement in global markets through free trade agreements may also open new export avenues.
As Thailand navigates a defining economic moment, its leaders and citizens alike will be watching closely how 2026 unfolds amid the unsteady balance of domestic politics and global economic shifts.
