Standard Chartered Bank (Thai) expects Thailand’s economy to face a more challenging second half of 2026, as the recovery in foreign tourist arrivals remains uneven, domestic demand stays subdued, and external uncertainties continue to weigh on confidence.
In its latest Thailand outlook, Standard Chartered Global Research has raised its 2026 GDP growth forecast slightly to 1.6% from 1.4%, reflecting better-than-expected growth earlier this year and near-term support from the government’s cost-of-living relief measures. However, growth momentum is expected to remain subdued in the second half of the year, with private consumption and tourism remaining key swing factors for the economy.
Foreign tourist arrivals have continued to lag earlier expectations, particularly from China, while hotel operators remain cautious about the outlook for the third quarter. Many operators have reported weaker-than-expected tourist numbers and have responded by reducing room rates to attract demand. Thailand’s foreign tourist arrivals contracted 3% year to date compared with the same period in 2025, while the average hotel occupancy rate stood at 69.0%.
Commenting on the outlook, Dr Tim Leelahaphan, Senior Economist, Standard Chartered Bank (Thai), said: “Thailand’s economy is moving into the second half of the year with less momentum and a narrower margin for error. Short-term fiscal support will help, but it will not be enough on its own. A stronger tourism rebound, firmer household purchasing power, and timely budget execution will be essential to turning a fragile recovery into a more durable one.”
Standard Chartered expects Thailand’s headline inflation to average 1.9% in 2026 and 1.5% in 2027, remaining within the Bank of Thailand’s target range. Core inflation is expected to remain low, reflecting subdued domestic demand. Against this backdrop, the Bank of Thailand is likely to keep monetary policy accommodative, with the policy rate expected to remain at 1.00% through end-2027.
The Bank also expects Thailand’s current account surplus to narrow to 0.2% of GDP in 2026 before improving to 1.5% in 2027, with performance dependent on the strength of the tourism recovery during the peak season. The fiscal outlook remains another area to watch, as delays in FY2027 budget disbursement could add downside risks to fourth-quarter growth, depending on the timing and scale of disbursements.
On the currency front, Standard Chartered maintains a cautious view on the Thai baht. The baht has weakened year to date, broadly in line with regional currencies, as Thailand faces pressure from subdued fundamentals, low yields, a stronger US dollar, and lingering uncertainty over tourism-related foreign-exchange inflows. The Bank forecasts USD-THB at 32.50 at end-2026, 33.50 at end-2027, and 34.50 at end-2028.
Dr Tim added: “While a weaker baht could provide a short-term boost to exports and tourism by improving price competitiveness, it cannot replace the need for stronger economic fundamentals. Thailand’s priority should be a coordinated policy response that rebuilds confidence, supports household purchasing power, and sustains the recovery momentum.”
Standard Chartered sees key risks to Thailand’s outlook from global headwinds, geopolitical developments, a weaker-than-expected tourism recovery, domestic political uncertainty and possible delays in budget execution. Still, Thailand’s macroeconomic stability, manageable public finances and ongoing policy support should help cushion downside risks while the economy awaits a more durable recovery.