What To Know
- Thailand’s economic outlook is entering a challenging new phase as forecasts from the University of the Thai Chamber of Commerce signal slower momentum ahead.
- The UTCC forecasts that 2026 growth will depend on a combination of tourism recovery, government investment—expected to rise more than 18 percent—and election-related spending of up to 60 billion baht in the first quarter.
Bangkok Business News: Mounting Pressures Signal a Tougher 2026
Thailand’s economic outlook is entering a challenging new phase as forecasts from the University of the Thai Chamber of Commerce signal slower momentum ahead. According to the institution’s latest assessment, national growth is expected to ease from an already underwhelming 1.9 percent in 2025 to an even weaker 1.6 percent in 2026. This Bangkok Business News report highlights how the fading export boom, ongoing domestic hurdles, and persistent global uncertainties will weigh heavily on the economy. Analysts warn that this slowdown is not a temporary dip but the continuation of deeper structural headwinds that have been building for years.
UTCC warns of a weaker 2026 as exports fade and domestic risks intensify.
Image Credit: Thai PBS
Export Surge Fades as Risks Rise
The UTCC’s Centre for Economic and Business Forecasting notes that the impressive 11.1 percent export surge seen in 2025 was largely driven by companies rushing shipments to the United States ahead of expected trade curbs. With that one-off boost now gone, the country faces a tougher external environment marked by possible US tariffs, aggressive “local content” rules, and geopolitical strains. Severe flooding in southern Thailand, which caused more than 40 billion baht in damages and shaved 0.22 percent off GDP, further contributed to the downgrade. Meanwhile, tourism continues to underperform, with 2025 arrivals revised down to 32.8 million and spending per visitor slipping as travelers become more price-conscious.
Domestic Weaknesses Add to the Burden
The domestic landscape offers little relief. High household debt, projected to hit 86.4 percent of GDP next year, is suppressing consumption and heightening the risk of a credit squeeze. Political uncertainty surrounding elections is expected to delay budget disbursement and suppress private investment sentiment.
Government consumption has already contracted nearly 4 percent in the third quarter, adding unexpected drag on activity. Tourism, once Thailand’s most reliable growth engine, has yet to deliver a strong recovery despite expectations of 35 million arrivals next year.
Growth Hinges on Fragile Recovery Drivers
The UTCC forecasts that 2026 growth will depend on a combination of tourism recovery, government investment—expected to rise more than 18 percent—and election-related spending of up to 60 billion baht in the first quarter. However, these supports may not be enough to counter the broader pressures from weak exports, fragile consumer demand, and unstable political conditions. Quarterly growth is expected to fluctuate, slowing to 1.5 percent in the second quarter before rebounding to 2.0 percent in the third quarter on the back of accelerated budget disbursement and low base effects.
Outlook for Businesses and Investors
Thailand’s economic narrative for 2026 underscores the need for firms and investors to prepare for volatility. The combination of heavy household debt, global protectionism, and domestic political transition could tighten liquidity, weaken purchasing power, and challenge corporate planning. Stakeholders will need to navigate a narrow path where resilience, adaptability, and targeted investment become essential tools.
The overall assessment from the UTCC stresses that Thailand’s growth path is becoming increasingly fragile. With export conditions worsening, tourism not yet fully revived, and domestic consumption restricted, the country enters 2026 with limited cushions against further shocks. Businesses will need to brace for uneven quarterly performance, slow demand expansion, and prolonged uncertainty that may persist well into the next fiscal cycle.
For the latest on the Thai economy, keep on logging to Bangkok Business News.
