Thai 2026 GDP growth could dip by 0.2% from Middle East conflict: central bank chief
He notes that the country’s external position is strong and any volatility can be handled
Published Wed, Mar 4, 2026 · 08:46 PM
[BANGKOK] Thailand’s central bank chief Vitai Ratanakorn said on Wednesday (Mar 4) that the country’s economic growth could drop by between 0.1 and 0.2 percentage point in 2026 due to the conflict in the Middle East.
He added that policy adjustments and additional financial measures could be rolled out as needed.
The Bank of Thailand governor also told reporters that he was concerned about inflation, but believed it could be managed.
He noted that the country’s external position was strong and any volatility could be handled, with the government working to mitigate the consequences of the war.
Vitai said that the steps put in place by the central bank should be enough to handle the current situation.
On Feb 25, the central bank unexpectedly cut its key interest rate to support growth, which is expected to be about 2 per cent in 2026, although Vitai has said that he was aiming for as high as 2.7 per cent.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
The Joint Standing Committee on Commerce, Industry and Banking on Wednesday maintained its gross domestic product growth forecast for 2026 at between 1.6 and 2 per cent, but warned of the risks that might arise from a prolonged conflict in the Middle East.
South-east Asia’s second-largest economy, which has lagged regional peers since the pandemic, expanded 2.4 per cent in 2025 with exports up 12.9 per cent.
The business group said that the lengthy hostilities would push up oil prices and reduce tourism, with visitors from the Middle East potentially falling by 10 per cent in 2026, from about 700,000 to 800,000 in 2025.
Thailand’s foreign tourist arrivals dropped 23 per cent in the week of Feb 23 to Mar 1 from the week before, with visitors from the Middle East down by more than 60 per cent and those from Europe down by more than 25 per cent.
In the year to date, the number of foreign visitors dropped 4.4 per cent from the year before to 6.6 million.
Prime Minister Anutin Charnvirakul said on Wednesday that the government would freeze domestic diesel prices at 29.94 baht (S$1.21) a litre, for at least 15 days from Wednesday.
Thailand has sufficient oil reserves for 60 days of consumption, the government said on Monday, adding that it is working to mitigate the consequences of any disruptions. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
