SME World fears prolonged war, projects 1.6% GDP growth by year-end

Khaosod•Economy•21d ago

Reader Briefing

SME sentiment wanes in April due to Middle East conflict, threatening to reduce full-year GDP growth to a low 1.6% if the war continues.

•The SME Sentiment Index (SMESI) for April 2026 decreased to 46.0, indicating a decline in business confidence.
•The Middle East conflict is identified as a primary driver, increasing costs for energy, transportation, and raw materials.
•This cost escalation is impacting various sectors, including manufacturing and services, leading to weaker purchasing power and slower investment.
•The Office of Small and Medium Enterprise Promotion (OSMEP) projects that prolonged conflict could reduce SME GDP growth to 1.6% for the full year 2026.

Overview

•SME Sentiment Index (SMESI) for April 2026 recorded at 46.0, a decrease from the previous month.
•The ongoing Middle East conflict is increasing costs for energy, transportation, and raw materials.
•SMEs, especially those in rubber, plastic, metal, and furniture, face pressure from higher costs and weakened purchasing power.
•The services sector, particularly tourism and hotels, is affected by rising travel costs.
•SME GDP for 2026 is projected to grow by 2.3% if the Middle East conflict ends by mid-year.
•SME GDP for 2026 is projected to grow by only 1.6% if the Middle East conflict extends until the end of 2026.
•Panita Chinwat, Acting Director of OSMEP, stated that SME confidence continues to decline.
•The SME Sentiment Index for the next 3 months is projected at 46.4, reflecting continued economic uncertainty.

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Key Quotes

Panita Chinwat

"Initially, it's assessed that if the Middle East war ends by mid-year, SME GDP in 2026 will grow by 2.3%, down from 2.4% last year. But if the war drags on until year-end 2026, it will impact SME GDP to grow to only 1.6%."

เบื้องต้นประเมินว่าหากสงครามตะวันออกกลางจบลงภายในกลางปีนี้ จะส่งผลกระทบต่อจีดีพีเอสเอ็มอีปี 2026 เติบโต 2.3% ลดลงจากปีก่อนโต 2.4% แต่หากสงครามยืดเยื้อไปถึงสิ้นปี 2026 จะส่งผลกระทบต่อจีดีพีเอสเอ็มอีให้เติบโตเหลือเพียง 1.6%

Key Entities

Organization

OSMEP(สสว.)

Office of Small and Medium Enterprise Promotion (OSMEP), an organization concerned with SME economic performance in Thailand.

Person

Panita Chinwat(น.ส.ปณิตา ชินวัตร)

Acting Director of the Office of Small and Medium Enterprise Promotion (OSMEP) who provided analysis on SME economic conditions.

Place

Middle East(ตะวันออกกลาง)ℹ️

A geopolitical region experiencing conflict that impacts global energy and raw material costs.