Thailand’s economic outlook has drawn pointed warnings from both the Bank of Thailand and private sector groups, who say deep structural vulnerabilities, an overvalued currency and slowing growth could heighten risks to competitiveness and credit perceptions.

At a recent monetary policy forum, the central bank highlighted that underlying structural headwinds — including a rapidly strengthening Thai baht, high household debt and a sluggish manufacturing base — have eroded key engines of growth and exposed the economy to heightened fragility.

Officials stressed that while policy space remains limited following a series of rate cuts aimed at supporting activity, monetary policy alone cannot address persistent weaknesses in private consumption, export momentum and financial conditions.

The bank acknowledged that the baht’s sustained strength, driven by global factors and capital inflows, was tightening liquidity for exporters and weighing on small- and medium-sized enterprises already challenged by external tariffs and subdued global demand.

In parallel, private sector bodies including industry and banking associations warned that GDP expansion could slow below two per cent in 2026, the slowest outside crisis periods in decades, as export growth wanes, external competition intensifies and household debt constrains domestic demand.

They argued that a powerful baht relative to regional peers erodes Thailand’s competitive position and could aggravate pressures on the export-dependent economy if left unchecked.

These concerns come amid lingering geopolitical and trade uncertainties, including potential tariff barriers that could further dampen foreign demand.

While Thailand’s institutions continue to project modest growth and remain committed to managing macroeconomic stability, the convergence of structural flaws, currency dynamics and external headwinds has prompted debate about future policy measures and the possibility of credit rating pressures if reforms are not accelerated.