THE Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) today (April 1) cut its 2026 GDP forecast for Thailand to 1.2-1.6 percent, down from previous projection of 1.6-2.0 percent, citing soaring global energy prices brought on by the Middle East war, PPTVHD26 said.
Mr. Kriengkrai Thianukul, chairman of this key committee, said the conflict in the Middle East is a significant risk factor slowing the global economy. This will have a ripple effect on employment and increase inflation, potentially leading to stagflation.
This is clearly reflected by rising government bond yields, the strengthening US dollar, and falling prices of gold and risky assets.
Furthermore, the most worrying risk is the potential shortage of key commodities such as crude oil, natural gas, and various raw materials. This would disrupt global production and through the supply chain affect individual consumers.
The problem of soaring energy costs has had a severe impact on the Thai economy with JSCCIB estimating that Thailand’s average inflation rate in 2026 will accelerate to 2.0-3.0 percent, a significant increase from the previous forecast of only 0.2-0.7 percent, resulting from higher domestic retail oil prices driven by global market mechanisms.
This situation requires the private sector to closely monitor the impact, including higher cost of living for citizens which will pressure consumption and private sector confidence; potential increase of government debt to support the economy; higher production costs that may undermine competitiveness; disruptions to logistics affecting exports; and the tourism sector, which is expected to lose around 1 million foreign tourists in the next three months due to travel restrictions.
However, while JSCCIB sees oil prices rising further if the war drags on or expands, a situation that needs close monitoring, should the war end quickly, as indicated by US President Donald Trump, oil prices may gradually recover and prices decline in the third quarter of the year.
Furthermore, JSCCIB proposed using this crisis as an opportunity to restructure the Thai economy to be more resilient and shock-resistant, following the “Reinvent Thailand” approach. The panel suggested that the Ministry of Energy revise the National Power Development Plan (PDP 2026) to reflect true costs, liberalise the electricity market, support renewable energy, and establish a joint public-private sector energy committee to remove various constraints.
“Therefore, JSCCIB supports the government accelerating measures to mitigate the impact on specific groups, known as Targeted Policies, such as SMEs and vulnerable groups. This includes controlling oil hoarding and price gouging, as well as implementing measures to reduce transport costs so that businesses can maintain their prices.”
Mr. Payong Srivanich, president of the Thai Bankers Association, said Thailand, as a net oil importer, needs to adjust its import sources and manage its supply chain effectively. Crucially, it is essential to prevent distortions in the domestic market mechanism, particularly in the distribution of oil to small businesses and the public. He pointed to loopholes in the system involving middlemen or jobbers.
JSCCIB therefore proposed a systematic registration of jobbers, linking data with the Department of Energy Business and the Department of Land Transport through the installation of GPS system to ensure transparent data verification and prevent illicit activities,
Phayong also mentioned the impact on the actual production sector, stating that businesses are facing challenges in adapting production processes and managing changing costs. Regarding mitigation measures, financial institutions are ready to provide assistance.
“Liquidity support is needed to sustain businesses, but overall relief is the responsibility of the government, which must oversee various mechanisms within budgetary constraints,” he said.”
CAPTIONS:
Top and Front Page – Representative image of rising cost of living. Photo – PPTVHD36
Insert – A press conference by JSCCIB members today, April 1, 2026. Photo – PPTVHD36
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