Technology exports and tourism drive July growth
Merchandise exports excluding gold increased in July, led by technology products, while industrial production expanded in line with overseas shipments.
Export value rose 2.3% from June. Growth was led by electronics, computer components and memory devices shipped to the United States, as well as printed circuit boards exported to Hong Kong and China.
Durian exports to China also performed strongly, but vehicle shipments declined, particularly exports of pickup trucks to the Middle East and Southeast Asia.
Tourism improved in both visitor numbers and revenue. Thailand welcomed 2.5 million foreign visitors in July, an increase of 7.6% from the previous month.
Long-haul markets, particularly Europe and the Middle East, provided much of the growth. Chinese arrivals also recovered as flight capacity moved closer to normal, supported by summer holidays in several countries.
Short-haul markets excluding China recovered more slowly and will require continued monitoring.
Private consumption increased 1.2%, driven mainly by spending on services, particularly hotels and restaurants. Government measures and the extended holiday period towards the end of July also supported activity.
Spending on durable goods increased with stronger sales of passenger vehicles and pickup trucks.
Consumer confidence improved following government measures to reduce living costs and an easing of Middle East tensions during the survey period. Consumers nevertheless remained concerned about high debt burdens and living costs.
Headline inflation declined as energy prices fell in line with global oil prices and government measures. Core inflation stood at 1.34%, with businesses gradually passing higher costs through to prepared food prices.
The baht was volatile during July, weakening on concerns over the Middle East conflict before strengthening in August alongside movements in the US dollar.
Recovery remains concentrated
The BOT expects the Thai economy to continue recovering, although growth remains concentrated in technology products and parts of the tourism industry rather than spreading evenly across sectors.
The global technology and AI cycle will remain an important driver of manufacturing and exports. Leading export indicators have improved as purchasing managers’ indices rose in several countries, largely because of technology-related manufacturing.
The BOT said exporters outside the technology sector would need to demonstrate that they could adapt to changing competitive conditions.
The central bank identified five risks requiring close attention:
Whether the global AI cycle can continue supporting economic activity.
Geopolitical conflicts and trade policy, particularly any renewed escalation in the Middle East that could affect oil prices and further US protectionist measures.
The effectiveness of government measures intended to stimulate consumption and investment.
The tourism recovery, particularly in short-haul markets that have yet to return fully.
El Niño, which the BOT expects to intensify from the fourth quarter of 2026 through the first quarter of 2027 and affect agricultural production.