Thailand is facing slower economic growth this year as a result of the war in Iran, with virtually “no limits” to the potential worst‑case outcomes if the conflict drags on. Assistant Governor Chayawadee Chai‑anant noted that growth in Thailand—one of the world’s most exposed economies due to its heavy dependence on imported energy—is losing momentum, while the tourism sector is also weakening.
Arrivals from Gulf countries fell to nearly zero in March and have yet to meaningfully recover. A senior central bank official told Reuters that visitors from the Gulf, who are typically high‑spending, usually account for about 7% of total tourism expenditure in Thailand. Tourist inflows from Malaysia, another crucial source market and growth engine for the industry, have also been declining.
In response, the central bank has cut its baseline GDP growth forecast for 2026 to 1.3%, on the assumption that the war will end in the second half of this year. This compares with its December projection of 1.9%. In February, the government had expected growth in a higher range of 1.5% to 2.5%. Under the current baseline scenario, inflation is forecast to reach 3.5%.
