BANGKOK, April 28 (V7N) — Thailand’s Ministry of Finance on Tuesday lowered its economic growth and tourist arrival forecasts for 2026, citing the severe impact of the ongoing conflict in the Middle East on global energy prices and international travel.

The ministry now projects Thailand’s GDP growth to dip to 1.6 percent this year, a sharp decline from the 2.4 percent recorded in 2025. This revised outlook reflects the "anaemic" state of the Southeast Asian nation's economy, which has struggled to gain momentum despite the post-pandemic reopening.

The tourism industry, a cornerstone of the Thai economy, is facing fresh setbacks. The ministry reported that Thailand now expects approximately 33.5 million foreign tourists in 2026—about two million fewer than the previous estimate. While this figure is slightly higher than the 33 million visitors received in 2025, it remains significantly below pre-Covid peaks.

The decline is primarily attributed to the spillover effects of the two-month-old war involving the U.S., Israel, and Iran. According to ministry statements, the conflict has driven up global fuel prices, making international travel more expensive and deterring visitors from key markets:

Middle East: Arrivals from this region fell by a third in March compared to the same period last year.

Europe: European arrivals dropped by approximately four percent.

Regional Growth: In contrast, tourists from other Asian nations rose by six percent, partially offsetting the decline in Western and Middle Eastern travelers.

The economic strain is being further compounded by a dramatic shift in inflation forecasts. The ministry warned that core inflation is now expected to hit 3.0 percent this year, a massive jump from the previous estimate of 0.3 percent. This spike is largely driven by volatile energy costs and the increased price of imported goods.

The Thai government had previously set a 2026 growth target between 1.5 and 2.5 percent in February. However, the escalating regional conflict has forced officials to adjust to the lower end of that range. Economists note that until global energy markets stabilize and the geopolitical situation in the Middle East improves, Thailand’s path to a full economic recovery remains clouded by uncertainty.

END/WD/RH/