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The Thai Chamber of Commerce stated that due to several unfavorable factors, Thailand's economic growth rate in 2026 risks falling below 0.9%. M127-23S Grain oriented electrical steel, The main sources of pressure include: US import tariffs, the ongoing border dispute between Thailand and Cambodia, and the potential for a three-month delay in the fiscal budget due to the dissolution of parliament.
The Thai Chamber of Commerce revealed that it has lowered its 2025 economic growth forecast for Thailand from 2.0% to 1.7%. The main reasons for the downward revision include severe flooding in 10 southern provinces, causing approximately 40 billion baht in economic losses, further exacerbating downward pressure on the economy.
As a result, the projected number of foreign tourist arrivals for 2025 has been revised downward from the originally planned 33 million to 32.8 million. Full-year tourism revenue from foreign visitors is now expected to reach only 1.5 trillion baht—lower than the previously projected 1.69 trillion baht. M127-23S Grain oriented electrical steel, Furthermore, government consumption is anticipated to contract significantly during the third quarter of 2025.
Looking ahead to 2026, Thailand's economic growth is projected to slow further, ranging from 0.9% to 2.0%, with a median of approximately 1.6%. The main reasons are: the risk of export contraction, a significant drop from the previously projected 11% growth rate for 2025; and the gradual impact of US tariff policies throughout the year. Furthermore, if negotiations on re-export trade fail, anti-circumvention or retaliatory tariffs could rise to as high as 40%.
The Chamber of Commerce also pointed out that Thailand's political situation will remain unstable next year. The dissolution of parliament and a new round of elections may delay the formation of a government. M127-23S Grain oriented electrical steel, If there is a three-month "window" in the 2027 fiscal budget, it could reduce GDP by approximately 0.32 percentage points. At the same time, tight liquidity and a high household debt ratio (86.3%) will force financial institutions to further tighten credit, and the growth rate of household loans may fall to zero, thereby constraining household consumption and investment by small and medium-sized enterprises.
Furthermore, geopolitical tensions between Thailand and Cambodia remain a significant risk factor. Should the border remain closed throughout 2026, Thailand’s export losses could exceed 140 billion baht, resulting in an impact of approximately 0.74 percentage points on GDP.
Under the baseline scenario, Thailand’s GDP growth is projected to be around 1.7% next year; however, in the most pessimistic scenario, economic growth could fall to as low as 0.9%. Key risk scenarios include:
1. If tariffs related to Thai re-export trade are raised to 60%, GDP will be impacted by approximately 0.39 percentage points;
2. The Thai-Cambodian border will remain closed throughout the year;
3. The dissolution of parliament in January and the resulting budget vacuum will result in a GDP loss of approximately 135.349 billion baht, a decrease of 0.71 percentage points;
4.A 3% contraction in commercial bank lending to residents will further drag down GDP by approximately 0.51 percentage points.
