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Economic Storm Warning: Twin Deficits, Weakening Baht

Economic Storm Warning: Twin Deficits, Weakening Baht

Prachachat•Economy•12d ago

Reader Briefing

Thailand's economy faces a looming storm, with forecasts pointing to twin deficits and a depreciating Baht, despite a better-than-expected first quarter.

  • •Thailand's economic growth forecast for 2026 remains between 1.5-2.5%, with the NESDC maintaining its outlook.
  • •The Bank of Thailand reported economic slowdown in April 2026 due to Middle East conflict, with inflation at 2.89%.
  • •The current account shifted to a deficit of $7.6 billion in April 2026.
  • •Multiple economic research firms have revised their 2026 GDP forecasts upwards, citing Q1 performance and government stimulus measures.
  • •Concerns are rising over 'twin deficits' (fiscal and current account) and a potential weakening of the Thai Baht.

Overview

  • •In the first quarter of 2026, Thailand's Gross Domestic Product (GDP) expanded by 2.8%, exceeding expectations.
  • •The National Economic and Social Development Council (NESDC) maintained its full-year GDP projection for 2026 at 1.5-2.5%.
  • •The NESDC's GDP forecast is made amidst ongoing Middle East conflict and its economic repercussions.
  • •Thailand's economy slowed in April 2026 due to the Middle East conflict, as indicated by economic indicators.
  • •The general inflation rate in April 2026 was positive at 2.89%, an increase from the previous month's negative 0.08%, mainly driven by energy prices.
  • •The current account balance in April 2026 recorded a deficit of 7.6 billion US dollars, a reversal from the surplus in the previous month, primarily due to a trade deficit of 6.8 billion US dollars.
  • •Kasikorn Research Center adjusted its full-year economic forecast for Thailand to 2%, up from a previous estimate of 0.8-1.2%.
  • •KKP Research projects Thailand's GDP to grow by 1.9% in 2026, acknowledging potential government stimulus but cautioning about geopolitical tensions and structural limitations.

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Source: Prachachat (Original)

Key Quotes

Methus Ratanasorn, Head of Economic Analysis, TISCO ESU
"“The shocking truth is that more factories have closed than opened for the first time in 10 quarters, especially small factories, contrary to large and medium factories expanding. This image reinforces that traditional industries are deteriorating.”"
“ความจริงที่น่าตกใจ คือ มีจำนวนโรงงานที่ ‘ปิดกิจการ’ มากกว่า ‘เปิดใหม่’ เป็นครั้งแรกในรอบ 10 ไตรมาส โดยเฉพาะโรงงานขนาดเล็ก สวนทางกับโรงงานขนาดใหญ่และกลางที่ขยายกิจการ ภาพนี้ตอกย้ำว่า ธุรกิจดั้งเดิม (Traditional Industry) กำลังย่ำแย่”
Methus Ratanasorn, Head of Economic Analysis, TISCO ESU
"“I warn not to be complacent, as the real storm is coming. If the war prolongs, oil prices could rise another 40-50% and risk shortages.”"
“ขอเตือนว่าอย่าประมาท เพราะพายุของจริงกำลังจะโถมเข้ามา หากสงครามยืดเยื้อ ราคาน้ำมันอาจดีดขึ้นไปได้อีก 40-50% และเสี่ยงจะขาดแคลน”

Key Entities

Organization

National Economic and Social Development Council (NESDC)(สภาพัฒนาการเศรษฐกิจและสังคมแห่งชาติ (สศช.))ℹ️
The Thai government agency responsible for economic planning and announcing GDP figures.
Bank of Thailand (BOT)(ธนาคารแห่งประเทศไทย (ธปท.))ℹ️
The central bank of Thailand, which monitors economic indicators.
Kasikorn Research Center(ศูนย์วิจัยกสิกรไทย)
A research arm of Kasikornbank that provides economic analysis and forecasts for Thailand.
Krungsri Research(วิจัยกรุงศรี)
A research department at Krungsri Bank providing economic and business analysis.
KKP Research
A research entity that analyzes economic trends and provides forecasts.
TISCO Economic and Strategy Analysis (TISCO ESU)(ศูนย์วิเคราะห์เศรษฐกิจและกลยุทธ์ทิสโก้)
An economic analysis unit of TISCO Securities, providing insights into the Thai economy.
Monetary Policy Committee (MPC)(คณะกรรมการนโยบายการเงิน (กนง.))
The committee responsible for setting Thailand's monetary policy, including interest rates.

Person

Methus Ratanasorn(เมธัส รัตนซ้อน)
Head of Economic Analysis at TISCO Economic and Strategy Analysis (TISCO ESU), quoted on economic vulnerabilities.
Dr. Kobsidth Silpachai, CFA(ดร.กอบสิทธิ์ ศิลปชัย, CFA)
Executive Director of Economic and Capital Market Research at Kasikornbank.

Law

Royal Decree Empowering the Ministry of Finance to Borrow Funds to Solve the Energy Crisis and National Energy Transition B.E. 2026(พระราชกำหนดให้อำนาจกระทรวงการคลังกู้เงินเพื่อแก้ไขปัญหาวิกฤตพลังงานและการเปลี่ยนผ่านด้านพลังงานของประเทศ พ.ศ. 2026)
A decree authorizing the Ministry of Finance to borrow funds for energy crisis resolution and transition in 2026.