Thailand: Still a neutral hold by BOT

Research evidence excerpt

Thailand: Still a neutral hold by BOT

Nomura | Asia Insights 24 June 2026

An upgrade in its GDP growth forecast for 2026 but a downgrade for 2027

The MPC raised significantly its GDP growth forecast to 2.3% for 2026 from 1.5%

(Nomura: 1.8%), citing a few factors (Figure 2). These include resilient exports and private

investment linked to the technology and AI cycle, government measures to mitigate the

energy crisis impact, and an improvement in the situation surrounding the Middle East

conflict. However, for 2027 the MPC reduced its forecast to 1.8% from 2.0% (Nomura:

2.0%), suggesting the improvement is short-lived. This is in line with our view that the

impact of fiscal support measures will be limited (see Asia Insights - Thailand: Hitting

fiscal limits, 22 June 2026). For both years, the BOT’s latest projections are below our

estimate of potential growth at around 2.4%.

... noting that growth remains low and uneven

In particular, the MPC emphasized that the overall economic expansion remains low and

uneven. SMEs continue to face significant constraints and face intense competition,

contrasting with the resilience demonstrated by large corporates. Household consumption

remains under pressure from decelerating income growth and rising living costs, with the

MPC warning that private consumption is likely to weaken once government relief

measures phase out. The BOT also noted that credit growth remains subdued as SME

loans continue to contract. We believe this signals that the BOT remains concerned about

the growth outlook, despite the 2026 upward revision.

Inflation pressures still seen as mainly from temporary supply-side sources

The BOT also marginally reduced its headline inflation forecasts to 2.8% for 2026 from

2.9% and to 1.4% for 2027 from 1.5%.