Bangkok: TISCO Financial Group has issued a warning regarding the pervasive risks threatening the Thai economy, with concerns that if the Middle East crisis continues, GDP growth in 2026 may dip below 1%.
According to Thai News Agency, TISCO Financial Group anticipates that the Thai economy will experience significant volatility this year, projecting a growth rate of merely 1.8%. Factors such as rising oil prices, geopolitical tensions in the Middle East, and the challenges of an aging society contribute to this economic uncertainty. These issues are exacerbating household burdens, particularly with high debt levels and escalating healthcare costs. Should these conditions persist, the Thai baht may weaken to 35 baht per dollar. TISCO underscores the importance of bolstering economic resilience at the family level.
Mr. Methas Rattanasorn, Head of Economic Research at the TISCO Economic and Strategy Analysis Center, provided an assessment of Thailand's economic prospects for 2026, highlighting pressures from both external influences and internal structural challenges. Despite support from private sector investments, the projected economic growth rate stands at a modest 1.8%. However, significant risks loom, particularly from the Middle East, including the potential closure of the Strait of Hormuz, a vital route for over 20% of the world's oil shipments.
Rising oil prices pose a critical threat to Thailand's economic health. A 10% increase in crude oil prices could reduce GDP by approximately 0.3-0.4 percentage points and increase inflation by about 0.8%. This situation may further weaken the Thai baht, potentially reaching 33 baht per US dollar for at least two consecutive quarters. If the geopolitical conflict prolongs or intensifies, economic growth could fall below 1%, with the baht depreciating to as much as 35 baht per US dollar, intensifying economic pressures.
In addition to these immediate concerns, Thailand faces long-term structural challenges such as climate change, which could diminish the country's economic value by 7-14% by 2050 without swift adaptation. The transition to a super-aging society presents another challenge, with the elderly population expected to reach 28% in the next 3-4 years, exerting pressure on the labor force, productivity, and fiscal resources.
Household vulnerability remains a significant issue, with household debt at approximately 90% of GDP. Income growth is lagging behind rising expenses, particularly healthcare costs, which are increasing by over 10% annually. This financial strain places many Thai households at risk of liquidity crises, potentially leading to a financial recession from unforeseen events.
Ms. Kusumah Prathomsrimekh, Senior Executive Vice President of TISCO Financial Group Public Company Limited, noted changes in demographic structures, with many elderly individuals still reliant on family support or employment for income, while government welfare falls short of covering actual expenses. This scenario underscores challenges to the long-term sustainability of economic and social systems.
The overlapping risks of economic volatility, inflation, energy dependency, climate change, and demographic shifts are significantly impacting households. Effective microeconomic risk management is increasingly critical for ensuring macroeconomic stability.
To address these challenges, TISCO Financial Group has launched the "Family First - 3 Save Series," a comprehensive family risk management system. This system integrates assets, liabilities, and goals, beginning with "Save Dreams" for securing future plans like education and retirement; "Save Risks" to mitigate impacts from illness, accidents, and income disruptions; and "Save Assets" to safeguard essential assets like homes, cars, and digital assets. The system offers personalized protection under an Open Architecture concept, allowing for a tailored selection of products from over 15 partner companies to meet each family's needs and values.