BANGKOK – Thailand’s economy is heading towards its slowest pace of growth in more than three decades, outside major crisis periods. Current forecasts put 2026 GDP growth at only 1.5% to 1.8%. Economists and global agencies are warning that without great structural changes, the country could slip into a long spell of weak growth.
These estimates come from widely watched sources, including the Bank of Thailand, the International Monetary Fund (IMF), Siam Commercial Bank (SCB), and the University of the Thai Chamber of Commerce (UTCC). The numbers also show a clear slowdown from the expected 2.0% to 2.2% in 2025. The main reasons include softer exports, stubborn domestic problems, and rising global trade friction.
The Bank of Thailand has cut its 2026 projection to 1.5%. It points to the ongoing effects of US trade policy and weaker global demand. The IMF also remains cautious, forecasting 1.6% growth. SCB chief economist Yunyong Thaicharoen has called growth below 2% “abnormal” for Thailand, describing it as the weakest in around 30 years outside shock periods such as the 1997 Asian Financial Crisis and the COVID-19 pandemic.
Other forecasts sit in the same range. The National Economic and Social Development Council (NESDC) expects 1.2% to 2.2%, with a midpoint of 1.7%. The World Bank projects 1.7%, and UTCC estimates around 1.6%. Together, these figures suggest Thailand’s main growth drivers, exports, tourism, and manufacturing, are losing steam at the same time.
Exports make up about 60% of GDP, and they are expected to drop after a short-lived lift in 2025. That boost came from firms shipping goods early to get ahead of planned US tariffs. Tourism is also recovering more slowly than hoped. Visitor numbers remain below pre-pandemic levels, and spending per traveller has fallen as people watch their budgets.
Global pressures expose long-standing weak spots
Thailand’s outlook looks worse because outside pressures are landing on top of existing issues. Possible US reciprocal tariffs, up to 19% or higher if talks fail, could hit electronics, automotive parts, and farming exports. Global growth is also slowing, with projections around 2.5% to 3.1%. At the same time, stronger competition tied to China’s export overcapacity is squeezing prices and market share.
At home, high household debt, nearly 170% of GDP, is holding back spending. Rising non-performing loans point to growing stress in the financial system. Private investment stays weak as firms face policy uncertainty, political changes ahead of elections, and damage from natural disasters, including recent floods that disrupted supply chains and tourism.
The OECD and AMRO have both flagged how these shocks bring old problems into sharper focus. Thailand is ageing fast, productivity growth has cooled, and the shift to newer tech and skills has moved too slowly. Without change, Thailand risks falling further behind ASEAN neighbours such as Vietnam and Indonesia, where growth often runs at double or triple these rates.
Stronger reform push tops expert advice
Economists largely agree on what comes next. Thailand needs firm structural reform to lift productivity, improve competitiveness, and build new areas of growth.
The IMF has stressed the need to move quickly on reforms that support productivity and competitiveness. It also points to targeted fiscal steps and support for innovation. SCB’s Economic Intelligence Center (EIC) has warned that without action to raise long-term potential, the country could face more fragile households, tighter public finances, and fiercer competition from abroad. It has also highlighted new growth options such as digital services, greener manufacturing, and higher-value tourism.
The World Bank has urged Thailand to improve digital pathways, including closing gaps in data systems and skills, so the economy is less reliant on older sectors. AMRO has called for renewed transformation through stronger human capital, better infrastructure, and higher-quality foreign direct investment, including in EVs, electronics, and data centres.
Business groups, through the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), have promoted a “Reinvent Thailand” agenda. Their focus includes upskilling, AI use, and sustainability. They have also pointed to delays in budget spending and political instability as reasons the government needs to act with more speed and clarity.
A turning point for Thailand’s economy
Thailand is due to host the World Bank and IMF Annual Meetings later this year, and the 2026 outlook underlines what is at stake. Some areas still show promise, including investment in smart electronics and a growing digital economy projected to expand by 4.2%. Still, these gains are not large enough to offset wider drags across trade, investment, and household spending.
Policymakers still have options. The central bank could cut rates again, after recent moves that left the policy rate at 1.25%. The government could also re-focus stimulus towards areas that lift long-term output, while speeding up reforms that remove bottlenecks and improve skills.
If low growth persists, it could deepen inequality, weaken investor trust, and dim the shine of Thailand’s past economic success. Many experts say fast, well-planned reform could lift potential growth and bring back momentum. If action stays slow, Thailand may face a long period of near-stagnant growth while neighbours move ahead.
