Tourism Dips but Exports Rise Amid Conflict

In April, Thailand’s economy weakened, with declines in tourism and private consumption due to the Middle East conflict. However, merchandise exports rose, and inflation increased from higher energy prices. Key issues to monitor include geopolitical developments and government measures.

Summary

• The Thai economy in April softened from the previous month, particularly in tourism and private consumption.

  o Tourism receipts declined in line with a decrease in the number of foreign tourist arrivals, in large part due to the Middle East conflict. Private consumption also declined, driven by lower spending on non‑durable goods, including consumer goods and fuel, amid higher energy costs that raised the cost of living. Spending on hotel and restaurant services also declined, resulting in weaker service sector activity.

  o However, merchandise exports excluding gold increased, supported by continued strong growth in technology products and automotive exports, in line with trading partners’ demand. Meanwhile, manufacturing production remained broadly stable. Supply disruptions from upstream raw material shortages related to the Middle East conflict remain limited.

• Headline inflation turned positive, driven mainly by higher energy prices, particularly domestic gasoline and diesel fuel prices. Core inflation increased from the pass‑through of higher energy costs to prepared food and public transport fares.
• Key issues to monitor: 1) Middle East conflict developments 2) the ability of businesses and households to adapt, 3) government economic stimulus measures, 4) potential changes in U.S. trade policy, and 5) developments in El Niño conditions

Source : https://www.bot.or.th/en/news-and-media/news/news-20260529.html

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