05.06.2026
Thailand’s economy slowed in 2025 and is expected to remain weak in 2026 before recovering modestly in 2027. Growth is constrained by softer tourism, high household debt, subdued private consumption and investment, and weaker external demand. Merchandise exports, especially electronics, provided support in 2025, but export growth is expected to normalise. Inflation was slightly negative in 2025, but is projected to rise temporarily in 2026 due to higher energy and transport costs before easing again in 2027. Fiscal policy is expected to remain supportive, while public debt stays below the legal ceiling but limits policy space. The current account remains in surplus, supported by tourism and goods exports, although the surplus is expected to narrow.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 2.4 | 1.5 | 2.0 |
| Inflation (%, yoy) | -0.1 | 2.9 | 1.5 |
| Employment rate (% of working-age population, 15+) | 67.5 | 67.4 | 67.4 |
| Fiscal balance (% of GDP) | -4.4 | -4.2 | -3.8 |
| Gross public debt (% of GDP) | 64.5 | 65.3 | 65.7 |
| Current account balance (% of GDP) | 1.7 | 1.2 | 1.4 |
Growth remains weak
Thailand’s real GDP growth reached 2.4% in 2025, supported mainly by merchandise exports, especially electronics, and resilient domestic demand. However, tourism was weaker than expected, and private investment remained soft. Household consumption was constrained by high debt, weak income growth and tighter credit conditions.
Growth is projected to slow to 1.5% in 2026 before recovering to 2.0% in 2027. Higher energy prices, weaker tourist arrivals, soft global demand and subdued private consumption are expected to weigh on activity in 2026. A modest recovery in 2027 should be supported by stabilising external demand, continued electronics exports and investment in new industries.
Tourism recovery remains incomplete
Tourism remains a key driver of Thailand’s economy, but the recovery has been slower and less complete than expected. Higher travel costs, weaker income growth in key source markets and regional competition have weighed on visitor arrivals and spending. Chinese tourist arrivals, in particular, remain below pre-pandemic levels.
Tourism should continue to support services, employment and the current account, but its contribution to growth is likely to be less powerful than before the pandemic. Raising tourism value added, improving safety perceptions, upgrading infrastructure and diversifying source markets will be important for sustaining the sector.
Inflation rises temporarily in 2026
Inflation was slightly negative in 2025, at -0.1%, reflecting low energy prices, government cost-of-living measures and subdued domestic demand. Inflation is projected to rise to 2.9% in 2026, mainly due to higher energy prices and transport costs, before easing to 1.5% in 2027.
The Bank of Thailand kept policy accommodative in 2026 to support the weak recovery, while noting that inflation pressures were mainly supply-driven. The main risks come from global oil prices, food costs, freight costs and exchange-rate movements. Weak domestic demand should help prevent a broad inflation spiral.
Fiscal space is increasingly limited
The fiscal deficit remains sizeable, reflecting continued support measures, public investment and social spending. The deficit is projected to narrow only gradually from 4.4% of GDP in 2025 to 3.8% in 2027.
Public debt is projected to rise from 64.5% of GDP in 2025 to 65.7% in 2027, remaining below the legal ceiling but limiting fiscal space. Ageing-related spending, healthcare costs, subsidies and investment needs will create further pressure. Improving revenue mobilisation and spending efficiency will be important for preserving fiscal sustainability.
External position remains in surplus
Thailand’s current account remained in surplus in 2025, supported by goods exports and tourism receipts. The surplus is projected to remain positive in 2026–2027, although it may narrow due to higher energy import costs and slower tourism recovery.
Thailand’s external position remains supported by large international reserves and a diversified export base. However, the economy is exposed to weaker Chinese demand, global electronics cycles, oil prices, geopolitical tensions and disruptions to tourism flows.
Overall outlook
Thailand’s outlook remains subdued. Growth is expected to slow in 2026 and recover only modestly in 2027, while inflation should rise temporarily before easing again. The main challenges are high household debt, weak private investment, ageing, low productivity growth and a tourism recovery that is less dynamic than before the pandemic. Sustained improvement will depend on stronger investment, digital and green industries, tourism upgrading, education and skills reform, and measures to reduce household debt vulnerabilities.
Sources:
World Bank, Thailand Macro Poverty Outlook, April 2026.
World Bank, Thailand Economic Monitor, February 2026.
Bank of Thailand, Economic Outlook, April 2026.
Bank of Thailand, Monetary Policy Decision, April 2026.
International Monetary Fund, World Economic Outlook, April 2026.
Asian Development Bank, Asian Development Outlook, April 2026: Thailand.
