Middle East War Impacts Thai Economy; Experts Urge Clear Policies to Boost Investment Confidence
The Middle East conflict's impact on energy prices has led the IMF to downgrade Thailand's 2026 growth forecast to 1.5%. Experts warn of a 'domino effect' causing inflation and urge the government for clear policies to maintain investor confidence.
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- 📰 Published: April 23, 2026 at 19:26
- 🔍 Collected: April 23, 2026 at 19:32 (5 min after Published)
- 🤖 AI Analyzed: April 23, 2026 at 20:58 (1h 26m after Collected)
Central News
(CNA, Reporter Li Tsung-hsien, Bangkok, 23rd) The Middle East conflict is taking a toll on Thailand's economy, which heavily relies on energy imports, leading to a downward revision of its economic growth rate this year to 1.5%. Experts point out that rising energy prices are creating a "domino effect" that pushes up inflation and economic uncertainty. If government policies lack clarity, it could further weaken foreign investor confidence and slow the momentum of economic recovery.
According to the latest forecast by the International Monetary Fund (IMF), Thailand's economic growth rate for 2026 has been revised down to 1.5%, lower than most regional countries, highlighting the vulnerability of Thailand's economy amid global turbulence.
The Bangkok Post reported today that Thailand relies on the Middle East for about 50% of its energy imports. If oil prices remain high over the long term, it will directly increase production and transportation costs and erode consumer purchasing power.
Kongkiat Opaswongkarn, CEO of Asia Plus Group Holdings, told the Bangkok Post that while Thailand is not directly involved in the war, its economic structure forces it to "bear almost all the impact." Higher energy prices not only drive up inflation but also compress corporate profits and overall economic growth.
Kongkiat noted that past oil crises have shown that supply disruptions are often accompanied by rising inflation and a slowdown in the global economy. In such a context, investment markets experience short-term volatility. He cited the temporary US-Iran ceasefire, which brought a brief market recovery benefiting sectors like technology, AI, and tourism, but the economic impact of the conflict will subsequently reflect in inflation, economic growth, and corporate earnings.
Notachard Chintakanond, Thailand Country Director for strategy consulting firm The Asia Group, told CNA that the impact of the Middle East conflict on Thailand is gradually becoming apparent, starting with energy as a "domino effect."
He said: "It starts with oil prices, but then comes inflation and overall uncertainty, potentially even leading to stagflation." He added that although the government is temporarily controlling energy prices, an atmosphere of unease permeates the market, and a lack of confidence among the public and businesses is affecting consumption and investment decisions.
Regarding industries, Notachard believes the impact is not limited to a single sector but affects all industries, particularly those highly dependent on energy and international mobility. He gave an example: "Tourism is a key industry, but the problem is not a decline in Thailand's attractiveness, but rather the uncertainty of flights and transportation affecting travelers' plans."
He also emphasized that foreign investor confidence is crucial. Thailand currently remains competitive in the region due to its advantages in infrastructure, geographic location, and neutral diplomatic stance. However, if the government's policies are not clear and predictable enough, it could weaken its investment appeal.
He told CNA: "Policy clarity is itself a competitiveness factor. If investors feel the government is unpredictable, that is the biggest risk."
The Thai government recently stated that it is considering borrowing about 500 billion baht (approximately 486.7 billion NTD) through an emergency decree to cope with the economic pressure caused by the energy crisis.
Notachard suggested that the government must strike a balance between short-term relief and long-term strategy. In addition to measures like energy subsidies, it needs to accelerate structural transformations such as promoting new energy, electric vehicles, and digital industries, while strengthening policy communication to boost market confidence. (Edited by: Chang Chih-hsuan) 1150423
(CNA, Reporter Li Tsung-hsien, Bangkok, 23rd) The Middle East conflict is taking a toll on Thailand's economy, which heavily relies on energy imports, leading to a downward revision of its economic growth rate this year to 1.5%. Experts point out that rising energy prices are creating a "domino effect" that pushes up inflation and economic uncertainty. If government policies lack clarity, it could further weaken foreign investor confidence and slow the momentum of economic recovery.
According to the latest forecast by the International Monetary Fund (IMF), Thailand's economic growth rate for 2026 has been revised down to 1.5%, lower than most regional countries, highlighting the vulnerability of Thailand's economy amid global turbulence.
The Bangkok Post reported today that Thailand relies on the Middle East for about 50% of its energy imports. If oil prices remain high over the long term, it will directly increase production and transportation costs and erode consumer purchasing power.
Kongkiat Opaswongkarn, CEO of Asia Plus Group Holdings, told the Bangkok Post that while Thailand is not directly involved in the war, its economic structure forces it to "bear almost all the impact." Higher energy prices not only drive up inflation but also compress corporate profits and overall economic growth.
Kongkiat noted that past oil crises have shown that supply disruptions are often accompanied by rising inflation and a slowdown in the global economy. In such a context, investment markets experience short-term volatility. He cited the temporary US-Iran ceasefire, which brought a brief market recovery benefiting sectors like technology, AI, and tourism, but the economic impact of the conflict will subsequently reflect in inflation, economic growth, and corporate earnings.
Notachard Chintakanond, Thailand Country Director for strategy consulting firm The Asia Group, told CNA that the impact of the Middle East conflict on Thailand is gradually becoming apparent, starting with energy as a "domino effect."
He said: "It starts with oil prices, but then comes inflation and overall uncertainty, potentially even leading to stagflation." He added that although the government is temporarily controlling energy prices, an atmosphere of unease permeates the market, and a lack of confidence among the public and businesses is affecting consumption and investment decisions.
Regarding industries, Notachard believes the impact is not limited to a single sector but affects all industries, particularly those highly dependent on energy and international mobility. He gave an example: "Tourism is a key industry, but the problem is not a decline in Thailand's attractiveness, but rather the uncertainty of flights and transportation affecting travelers' plans."
He also emphasized that foreign investor confidence is crucial. Thailand currently remains competitive in the region due to its advantages in infrastructure, geographic location, and neutral diplomatic stance. However, if the government's policies are not clear and predictable enough, it could weaken its investment appeal.
He told CNA: "Policy clarity is itself a competitiveness factor. If investors feel the government is unpredictable, that is the biggest risk."
The Thai government recently stated that it is considering borrowing about 500 billion baht (approximately 486.7 billion NTD) through an emergency decree to cope with the economic pressure caused by the energy crisis.
Notachard suggested that the government must strike a balance between short-term relief and long-term strategy. In addition to measures like energy subsidies, it needs to accelerate structural transformations such as promoting new energy, electric vehicles, and digital industries, while strengthening policy communication to boost market confidence. (Edited by: Chang Chih-hsuan) 1150423