Real GDP growth is projected to decrease to 1.5% in 2026 from 2.0% in 2025 as higher tariffs weigh on exports and investment and as household consumption weakens, before picking up to 2.6% in 2027 as the tariff impacts fade. Inflation will increase gradually but remain below the 2% centre of the inflation target range. Uncertainties around the ongoing impacts of tariffs on goods exports, faltering income from tourism and the evolution and impact of high household debt on consumption are key risks to the outlook.

Given increasing fiscal deficits, consolidation is needed to reduce the public debt burden. Meanwhile, monetary policy could ease further if economic conditions worsen, conditional on inflation remaining low. Quantitative policy indicators point to considerable scope for regulatory reforms, including in trade regulation and competition policy. These would facilitate stronger market competition, thereby boosting productivity.

Productivity growth is the main source of increasing economic prosperity and living standards in the long term. Productivity has been growing fast in Thailand for many decades. However, like many OECD countries, Thailand has experienced a slowdown in recent years. As the country aspires to become a high-income economy by 2037, reviving productivity growth will be paramount. Economic institutions are key in identifying the reasons for the slowdown and helping design policies to reverse it. This report assesses capabilities of Thailand’s institutions to analyse productivity and to develop policies to boost it. The report provides sequenced and tailored recommendations to strengthen these institutions and policies, drawing on the OECD’s longstanding and extensive research on productivity institutions, data and policies.