Thailand's Economic Growth Faces Challenges Amid Global Tensions

Thailand's economy is expected to face further slowdown this year due to the combined impact of a weakened tourism sector, declining exports, and rising energy prices. According to Jin10, the University of the Thai Chamber of Commerce, a leading private forecasting institution, estimates that if tensions in the Middle East persist for three months, Thailand's GDP growth rate could be halved from the previously predicted 2%. Last year, the country's economic growth rate was 2.4%. In a more severe scenario, if the conflict extends to six months, the growth rate could decrease by as much as 2.3 percentage points, potentially leading to an economic contraction. This would mark the first annual decline since the COVID-19 pandemic in 2020. Tourism is seen as the most direct channel of impact. Thailand's target of attracting 36.7 million foreign tourists this year is increasingly at risk, with visitors from Europe and the Middle East accounting for about a quarter of the total. These tourists are likely to reduce their travel plans. The effects may extend beyond tourism. As shipping disruptions affect routes to Europe, Thai exporters are also facing ripple effects. Industries such as automotive and machinery, which rely heavily on European and Middle Eastern markets, are particularly vulnerable to these shocks.