UOB Global Economics & Markets Research highlights that Thailand’s economy remains characterized by low growth and low inflation, even as authorities forecast modest improvement in 2026 and 2027. Despite some downside risks to near-term growth, UOB expects 2026 to mark a cyclical low and continues to forecast a final 25 basis point interest rate cut at the upcoming BOT meeting.

Low economic growth and inflation justify further easing of monetary policy

“Looking ahead, authorities forecast growth in 2026 of 1.5% to 2.5% (midpoint 2.0%), with headline inflation of -0.3% to 0.7%.”

“Noting upside risks to the near-term growth outlook, we maintain our medium-term view that 2026 will be a cyclical low (1.8%), followed by a rebound to 2.5% in 2027.”

“After 2026, Thailand will stand out from the global background as a low-growth, low-inflation economy, confirming that the constraint is not only cyclical demand but also structural growth potential.”

“We maintain our view that the BOT is likely to reduce the policy rate (1-day redemption rate) by 25 bps to 1.00% at the MPC meeting on February 25, 2026, from the current 1.25%.

“We see this as the final stake in the cycle.”

(This article was created with the assist of an artificial intelligence tool and has been reviewed by an editor.)