BANGKOK, THAILAND – Sharp exchange-rate swings, weak growth and a fragile domestic economy put Thai businesses under heavy pressure in 2026, as banks and rating firms urged active hedging and measured optimism.
Multidimensional risks for businesses
Deputy director-general and head of financial markets at Siam Commercial Bank (SCB), Patrick Poulia, described the 2026 macroeconomic environment as shaped by multidimensional challenges affecting both the real economy and financial markets.
According to Poulia, high volatility on global financial markets driven by geopolitical tensions, uncertainty over trade and interest-rate policy, supply chain disruption and the rapid spread of digital technologies and AI changed cost structures, competitiveness and revenue volatility for companies.
Currency risk and false sense of security
Poulia saw currency risk as particularly critical, as small and medium-sized enterprises on average hedged only about 50 percent of their foreign-currency liabilities, even though exchange-rate volatility stood at 7–8 percent, higher than in the past.
“This hedging ratio may not be sufficient, so the bank wants corporate clients to raise their hedging share to 70–80 percent, but the truly dangerous factor is complacency – doing nothing because an apparently calm market is seen as safe and hoping the Bank of Thailand (BOT) will somehow keep the baht stable. This mindset remains risky.”
said Poulia, SCB deputy director-general.
Baht caught in global financial tides
Lead financial market strategist Wachirawat Banchuen said baht volatility in 2026 would increase in step with global market movements, as appreciation pressures came simultaneously from gold prices, domestic politics, capital inflows into emerging markets and improved investor sentiment after the election.
He noted that previous phases of baht appreciation had been accompanied by inflows of up to 100 billion baht into equity and bond markets, while the US dollar, as the main driver with a 40–50 percent market share, could weaken by another 2–3 percent, amplified by portfolio shifts triggered by AI disruption into safe assets such as bonds.
Gold, speculators and a strong baht
“The correlation between the gold price and the baht remains high, especially when the gold price jumps by more than US$100 per ounce overnight, the baht immediately appreciates by 30–40 satang,”
said Wachirawat, SCB strategist.
He pointed out that some foreign investors already used the baht as a proxy for gold investment instead of holding physical gold. This practice of using the baht as an instrument for gold exposure added further intensity to currency fluctuations, while short-term support was seen at 30.85 baht per US dollar and a gradual weakening was expected in the second half of the year when foreign investors repatriated dividend payouts.
Weak structure and pressure on monetary policy
At the same time, Wachirawat assessed the country’s economic structure as still weak and put projected GDP growth for 2026 at only 1.8 percent, below potential growth of 2.5–2.7 percent. He cited weak domestic demand, negative inflation, tight financing conditions, shrinking loan volumes and high household debt as key drags.
Additional risks came from El Niño, drought, fires and geopolitical tensions, which could push growth below 2 percent and force further rate cuts by the Monetary Policy Committee (MPC). He added that BOT interventions in the foreign-exchange market over the past twelve months, at 1.8–1.9 percent of GDP, were already dangerously close to the 2 percent threshold used by the US Treasury to monitor potential currency manipulation.
Cautious optimism on growth and investment
Somewhat more upbeat, Pimnara Hirankasi, head of Economic Research at Bank of Ayudhya PCL (Krungsri), said at the event “2026 Economic Outlook: Between Headwind and Hope” that Krungsri had raised its 2026 GDP forecast from 1.8 to 2.0 percent.
She attributed this slight upward revision to foreign capital inflows, increased confidence in the political stability of the government, possible stimulus programs and BOI applications totaling 1.87 trillion baht. These applications were expected to benefit from production shifts out of China into Southeast Asia in future industries such as data centres, electronics, e-mobility and agritechnology.
Tourism support, exports drag
According to Krungsri, the tourism sector was set to strengthen further in 2026, with an expected 35.5 million visitors generating 1.67 trillion baht in revenue. New flight connections from China and India, as well as a rise in Chinese arrivals to around 400,000 in the first quarter of 2026, supported this outlook.
At the same time, Pimnara expected headwinds from a forecast 0.4 percent decline in exports in 2026 after a strong 12.7 percent increase in 2025, driven by rising US protectionism and a slowdown in global trade. Private consumption was also expected to weaken after the expiry of the co-payment scheme, while new fiscal stimulus was hard to implement due to limited budgetary space.
Rate cuts as a lifeline for borrowers
Against this backdrop, Pimnara judged the MPC’s recent decision to cut policy rates as faster than expected but necessary given below-potential growth, low inflation and tight liquidity after six consecutive quarters of credit contraction.
“This rate cut is a kind of lifeline for the economic system, because lower lending rates reduce the burden of household debt, even though a genuine revival in credit demand will still depend on other factors such as the effective transmission of monetary policy by commercial banks,”
said Pimnara, Krungsri head of Economic Research.
She added that studies showed households with incomes below 10,000 baht could barely cover their current expenses, while those earning under 30,000 baht devoted around 31 percent of every additional baht of income solely to debt repayment.
Steady policy rate, slightly stronger baht
Krungsri expected the policy rate to remain at 1 percent throughout 2026, leaving the MPC with only two additional cuts as an emergency tool, consistent with an overall accommodative monetary stance.
In a similar vein, TRIS Rating raised its 2026 GDP forecast from 1.7 to 2.1 percent, supported by stronger-than-expected 2.4 percent growth in 2025. At the same time, it pointed to a moderation later in the year due to weak private consumption, delayed budget disbursements for 2027 and export uncertainties.
TRIS projected an unchanged policy rate of 1.00 percent until the end of 2026 and a slightly stronger baht, with an average of 32 baht per US dollar in 2026 compared with 32.9 in 2025.