2. Slowing global economy and global trade

NESDC warns of several uncertainties:

(1) Prolonged global trade tensions and rising protectionism, which could undermine global investment confidence and disrupt supply chains, especially in key sectors such as rare earth minerals, steel, aluminium, vehicles, and parts.

(2) The shifting direction of major central banks’ monetary policies.

(3) A downward electronics cycle amid high competition and the risk of new US tariffs on tech-related goods, combined with China’s controls on rare earth exports, potentially weakening Thailand’s investment and export outlook.

(4) Geopolitical conflicts, with inflation risks linked to higher global commodity and energy prices.

(5) Financial market volatility, driven by re-pricing of tech stocks—particularly in the US, where AI-related investments have pushed valuations to record highs. A correction could slow consumption and reduce household wealth, affecting economic recovery.


3. High private-sector debt

Private debt remains a key barrier to domestic demand recovery. Household debt reached 86.8% of GDP in Q2 2025 (down from 89.7% a year earlier), yet remains higher than 82.6% in Q2 2019, before COVID-19.

Loan quality has also deteriorated, especially personal consumption loans, where both NPLs and SMLs continue to rise. As a result, banks remain cautious in lending to high-risk borrowers, particularly SMEs and vulnerable low-income households, limiting liquidity and putting pressure on domestic demand.


4. Economic and political uncertainty before and after the election

Consumer and investor confidence may be affected, as seen in volatility in the Business Sentiment Index (BSI) during government transition periods. Political uncertainty may also delay the formation of a new government, potentially causing delays in the FY2027 budget process, which could affect fiscal planning and economic momentum.

The NESDC concludes that these risks must be closely monitored as they will determine the strength and resilience of Thailand’s economic recovery in 2026.