BANGKOK, Thailand – The Finance Ministry on Friday raised its 2026 economic growth forecast to 2.5% from a previous estimate of 1.6%, driven by a recovery in exports and a surge in foreign direct investment. Winich Visessuvanabhumi, director-general of the Fiscal Policy Office and ministry spokesperson, said the upgrade was supported by clear signs of recovery in exports, private investment, and private consumption. Exports, a key driver of the Thai economy, are now projected to grow by 12.5% in U.S. dollar terms this year, up from a previous forecast of 6.2%, following a 10.9% expansion in the first five months of the year due to recovering global demand.
Private investment is expected to expand by 9.0%, aided by an investment acceleration scheme. Foreign direct investment reached 187 billion baht ($5.3 billion) in the first half of 2026, marking a 68.3% increase year-on-year, with significant inflows into new targeted industries. Imports are forecast to grow by 19.0% as manufacturers import capital goods and machinery to expand production capacity, despite higher energy costs in the second quarter. Domestic private consumption is projected to grow by 2.7%, supported by government measures to ease energy living costs. Public investment and public consumption are expected to rise by 3.2% and 1.5% respectively, following the timely completion of the 2027 budget framework.
Headline inflation is forecast at 2.0% for the year, based on an assumed average Dubai crude oil price of $82 per barrel, down from a previous estimate of $91. The current account is expected to post a minor deficit of $500 million, or about 0.1% of GDP. Winich stated that the ministry aims for 2026 to be a year of investment, noting that Thailand’s regional infrastructure and neutral diplomatic stance have made it an attractive destination for supply chain relocations amid global conflicts. However, the ministry highlighted three key risk factors: rising Middle East tensions that could drive up energy prices, protectionist trade policies including potential U.S. tariffs, and extreme weather risks from a Super El Niño that could impact agricultural costs later in the year. (TNA)
