Bangkok: Thailand's economy expanded by 1.9% in the second quarter of 2026, a slight deceleration from the 2.8% growth observed in the first quarter. Despite surpassing the 1.5% growth forecasted by analysts, questions remain on why the public has not felt an increase in their disposable income.
According to Thai News Agency, Dr. Thitima Chucherd highlights a "K-shaped recovery" pattern in the Thai economy. The "Upper K" shows robust growth in exports and private sector investments, particularly in technology and data centers, recording a growth of approximately 13.4%. Conversely, the "Lower K," which includes the grassroots and SMEs, struggles with high debt and reduced purchasing power, as evidenced by the slowing private consumption growth to 1.9%.
While technology exports have been pivotal in economic recovery, the current account deficit poses a significant structural problem. Despite a 12.5% growth in exports, imports have surged to 24-25%, driven by high-priced fuel imports and upstream electronic components. This has resulted in a current account deficit of 600 billion baht, or 12% of GDP.
On the household front, the debt-to-GDP ratio has decreased below 85% as households cut expenses to manage debts. Many are turning to informal borrowing sources due to tighter credit access from financial institutions. The rising cost of living, coupled with stagnant oil prices, further strains purchasing power.
Looking ahead, Dr. Thitima warns that achieving the GDP target of 2.0-2.5% for 2026 requires navigating external risks such as the ongoing Middle East conflict and the intensifying US-China trade war, which could impact Thailand's export competitiveness.
Thailand's economic resilience in this volatile era depends on adaptation across sectors. Businesses need to align with global trends, households must diversify income streams, and the government must restructure the economy and implement effective policies to address the fragile global landscape.