![\"A](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/04\/6056638_800.jpg\")
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\t\t\t\t\t\t\t\t\t\t\t\t\tA woman prepares a meal on a gas stove in an eatery. Energy prices remain a key cost factor for small businesses.\u2009 (Photo: Apichart Jinakul)\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n
Thailand’s economy is increasingly seen as fragile now that the Songkran holiday has come to an end, as price freezes on energy and other products are discontinued.<\/p>\n
Businesses have warned that they may need to raise prices to reflect higher costs, while household disposable income has remained flat or declined amid the impact of the Middle East war.<\/p>\n
The new government, including Finance Minister Ekniti Nitithanprapas, has said it will seek to prevent stagflation, while acknowledging potential risks.<\/p>\n
Mr Ekniti said fiscal discipline will be upheld, though public debt may be allowed to exceed the 70% of GDP ceiling if necessary. Unnecessary spending will also be cut in the next fiscal year’s budget.<\/p>\n
During the policy debate earlier this month, opposition parties also questioned how proposed taxes would be implemented to ensure they are both adequate and well targeted in addressing possible stagflation in Thailand.<\/p>\n
TACKLING INFLATION<\/p>\n
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC), said there was no clear definition of the level of economic growth that can be considered stagflation.<\/p>\n
In theory, a growth rate of around 2% is seen as stagnation, while inflation above 5% is considered high.<\/p>\n
For Thailand, the Office of the National Economic and Social Development Council recently projected economic growth of between 0.2-1.4% this year, while UTCC forecasts growth of 0-1.5%, with a possibility of contraction if the conflict in the Middle East drags on.<\/p>\n
However, he believes inflation is unlikely to exceed 4.5% this year, as the government is expected to contain it by managing electricity costs and securing energy at reasonable prices for various sectors.<\/p>\n
Technically, stagflation could occur if inflation rises above the 3% target, while economic growth remains low at around 1% or less.<\/p>\n
In terms of severity, inflation is unlikely to surpass 5%. The real concern would be if such conditions persist — for example, if the economy faces 2-3 years of zero or negative growth and inflation becomes uncontrollable.<\/p>\n
“If the war drags on, stagflation could persist for more than two years, which would be worrying,” Mr Thanavath warned.<\/p>\n
Regarding inflation management, he said the Commerce Ministry can implement measures such as price controls and export quotas for goods like palm oil to help rein in inflation.<\/p>\n
“The Ministry should have regular discussions with businesses, as price controls intended to protect consumers can sometimes reduce business profits. If profits decline and businesses cannot operate normally, they may be forced to lay off workers. This may create non-performing loans,” Mr Thanavath said.<\/p>\n
He said that the ministry should control exports, regulate prices, and seek to expand export markets.<\/p>\n
Additionally, the Department of Internal Trade and provincial commerce offices could monitor supply and demand, identifying where goods are oversupplied or in shortage, and redistributing them as required.<\/p>\n
“The ministry has legal authority to control prices, but must consider how much the private sector can bear. While the ministry has the power to intervene, it must ensure that businesses can continue their operations,” he stressed.<\/p>\n
Regarding economic stimulus initiatives such as the Khon La Khrueng Plus co-payment scheme, he indicated that the government may need to proceed with them to maintain its credibility and support the economy.<\/p>\n
“If the Middle East conflict eases and the policy is introduced in May, it would be timely as an economic stimulus. However, if the situation does not improve, the government may delay implementation. Alternatively, it could begin with a smaller budget, prioritising vulnerable groups. The administration should avoid excessive spending and reserve funds for emergencies,” he said.<\/p>\n
![\"Street](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/04\/6056643.jpg\")
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Street markets remain popular among low-income shoppers, who are expected to tighten spending in coming months.\u2009 Varuth Hirunyatheb<\/p>\n
STAGFLATION RISK<\/p>\n
Independent economist Aat Pisanwanich urged the government to speed up investment to mitigate the impact of the energy crisis, warning that it could push the Thai economy into mild stagflation in the second quarter of this year.<\/p>\n
However, he noted that if policymakers want to prevent stagflation from extending into the third and fourth quarters, the government will need to step up domestic investment to offset the economic fallout from the energy crisis.<\/p>\n
“Inflation in the second quarter could rise to 3-4%, up from below 1%, while economic growth may slow to just 1%, potentially placing the Thai economy in a state of mild stagflation,” he said.<\/p>\n
He noted that even if the Gulf conflict comes to an end, oil prices are likely to remain elevated at around US$100 per barrel for another 1-2 years, which would continue to weigh on both the economy and domestic inflation.<\/p>\n
Higher oil prices would dampen domestic consumption, while Thailand’s exports and tourism sector would also be affected by the broader global economic slowdown caused by expensive energy.<\/p>\n
He said the new phase of the co-payment scheme, which the Anutin Charvirakul administration plans to launch by May, should help support the economy to some extent.<\/p>\n
In the first phase of the scheme, about 40 billion baht in budget spending helped boost GDP by around 0.2 percentage points. If the new phase now being prepared injects around 100 billion baht, it could help support this year’s economy by roughly 0.4 percentage points, he estimated.<\/p>\n
On efforts to attract investment within Asean, he said all countries in the region are targeting the same new industries, particularly electric vehicles (EVs) and semiconductors.<\/p>\n
As a result, attracting foreign direct investment (FDI) will depend on each country’s production costs, including labour costs in the form of wages, energy prices, and the readiness of the domestic workforce in terms of skills.<\/p>\n
He noted that over the past 10 years, Thailand has ranked fifth among the five major Asean economies, comprising both high-income and upper-middle-income countries.<\/p>\n
Singapore ranked first in FDI inflows, followed by Indonesia, Malaysia, Vietnam and Thailand.<\/p>\n
“Thailand has remained in fifth place for the past decade because of high production costs, political instability, an inadequately prepared workforce, and frequent policy changes,” Mr Aat said.<\/p>\n
He added that Thailand should therefore not be overly encouraged by the fact that FDI inflows last year reached their highest level in a decade, because compared with the five major Asean economies, the country still remains at the bottom of the rankings.<\/p>\n
Kriengkrai Thiennukul, acting chairman of the Federation of Thai Industries, also agreed that the twin pressures of economic stagnation and high inflation are not expected to emerge as soon as the second quarter.<\/p>\n
It is true that high fuel costs will drive up the prices of goods and services at a time when Thailand is still reeling from the sluggish economy, but both the government and business sectors are struggling to solve the problems.<\/p>\n
Despite the need to reduce oil subsidies as the Oil Fuel Fund remains in the red, authorities have persuaded refinery operators to cut ex\u2011refinery diesel prices, easing soaring fuel costs while also helping to control the prices of essential goods in the market.<\/p>\n
SELF-HELP MANOEUVRES<\/p>\n
“The business sector is also trying to maintain employment, though some entrepreneurs have to delay investment, production and hiring,” said Mr Kriengkrai.<\/p>\n
“With these efforts, I don’t think we are heading towards stagflation.”<\/p>\n
Higher diesel prices discourage people from filling up their tanks frequently, but they still use fuel. Money continues to circulate, and the economic system continues to function, said Mr Kriengkrai.<\/p>\n
He said that both the government and the public are adapting to the energy crisis, which is very severe at the moment.<\/p>\n
“The manufacturing sector has made serious adjustments to its operations, leaving us almost at our wits’ end,” said Mr Kriengkrai, adding that manufacturers have reduced operating costs, adopted renewable energy, and carried out risk management plans.<\/p>\n
It is vital to see how the Israel-US war with Iran develops.<\/p>\n
“US President Donald Trump tends to change his thoughts and words almost daily. The government must keep monitoring the situation closely,” he said.<\/p>\n
Watcharapong Khunpluem, president of the Thai Hotels Association’s Eastern Chapter, said that after the Songkran holiday, travellers will be more cautious about their spending due to a possible surge in living costs amid the Middle East crisis, as goods and transport prices are expected to rise.<\/p>\n
Both leisure and business segments are expected to decline, as travellers tighten their travel budgets after spending during the holiday period.<\/p>\n
Meeting groups from the public and private sectors, which typically fill vacant rooms in May, have already slowed down due to the government’s work-from-home policies and concerns over travel costs.<\/p>\n
Foreign markets are not expected to recover, particularly the Middle East market, although there are still short-haul tourists, especially from India and China, while long-stay Russian visitors remain in Thailand.<\/p>\n
Mr Watcharapong said that hotel operators have opted to maintain their room rates and reduce operational expenses to secure sufficient occupancy, instead of raising prices.<\/p>\n
They also have to maintain larger inventories to stabilise prices and revise their budget plans more often.<\/p>\n
To avoid being burdened by fixed costs, hotels have to hire more casual staff and extend internship programmes for students to up to six months or one year to help reduce labour expenses.<\/p>\n
Green practices, such as using glass bottles instead of plastic bottles, will be adopted more intensively to help cut costs.<\/p>\n
FINANCIAL CRISIS LOOMS<\/p>\n
Natthawut Chantanajulapong, senior investment strategist at Krungthai Xspring Securities, said global markets are entering a transition phase, shifting from concerns over geopolitical risk towards a fully-fledged financial crisis.<\/p>\n
“While military conflict remains a key focus for investors, economic indicators are beginning to tell a different story. Notably, Brent crude prices have started to trade within a wider range and have not made new highs since the first week of the attacks, suggesting that war-related factors are stabilising and are no longer the sole driver of market pressure,” he said.<\/p>\n
Instead, the real downside risk is evolving into “more complex and severe structural financial issues”.<\/p>\n
“This cycle of risk has shifted from a quantitative concern [supply shock] to a systemic stability concern [systemic risk],” he noted.<\/p>\n
This is reflected in increasingly “distorted” asset behaviour, where markets are no longer responding to war headlines with typical safe-haven buying, but rather with broad-based sell-offs across asset classes.<\/p>\n
“This dynamic suggests that markets are now confronting a fear greater than war itself, the expectation that war-driven impacts could lead to sticky inflation, forcing central banks globally to maintain tighter monetary policy,” said Mr Natthawut.<\/p>\n
However, this also introduces a second layer of risk: rising default risk and liquidity shortages or financial and credit risk.<\/p>\n
“These structural vulnerabilities could inflict more severe and prolonged damage on global wealth than military conflicts, with far-reaching implications for financial stability,” he said.<\/p>\n
Nuttaporn Triratanasirikul, deputy managing director of Kasikorn Research Centre, said that given current high oil prices, the easing cycle of monetary policies all over the world is coming to an end.<\/p>\n
Instead, global central banks would be pressured to hike interest rates to stem soaring inflation, which threatens their economic growth. The Bank of Thailand, for example, would maintain its policy rate at 1% for the rest of 2026.<\/p>\n
“After a surprise cut in February, we do not expect the Bank of Thailand to further slash the rate this year as high oil prices pushed up inflationary pressure. Such a move is in line with other global central banks,” Ms Nuttaporn told the Bangkok Post.<\/p>\n
Soraphol Tulayasathien, senior executive vice-president of the Stock Exchange of Thailand, shared a similar view, saying that the US Federal Reserve is unlikely to cut Fed fund rates this year.<\/p>\n
“The market has ruled out the possibility of the Fed rate cut this year,” he noted. “On the contrary, the US central bank might lift the rates if inflation rises a lot because of the Middle East war.”<\/p>\n
PRICE HIKES<\/p>\n
The Ministry of Commerce’s Trade Policy and Strategy Office has indicated that rising energy and raw material costs will gradually drive up prices for many items included in inflation calculations. This trend is based on the price increases during the start of the 2022 Russia-Ukraine war.<\/p>\n
Price hikes are divided into two main groups. The first is expected to see increases of 0-5%. This includes cooking ingredients such as ready-made coconut milk and seasonings such as fish sauce, and beverages such as drinking water, ready-to-drink coffee, and tea.<\/p>\n
Consumer goods such as detergent, toilet cleaner and garbage bags are also likely to rise in line with higher costs.<\/p>\n
Personal care products, including soap, shampoo, toothpaste, toothbrushes, razors, toilet paper, sanitary pads, and disposable nappies, are expected to see price increases.<\/p>\n
Another group comprises products which are expected to see price hikes of 5-10%, such as instant coffee powder, soft drinks, fabric softener, and dishwashing liquid, while vegetable oil prices are forecast to rise by more than 10%.<\/p>\n
![\"Revellers](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/04\/6056648.jpg\")
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Revellers enjoy the final throes of Songkran in Samut Prakan, as attention turns to the economic outlook after the holiday.\u2009Somchai Poomlard<\/p>\n","protected":false},"excerpt":{"rendered":"A woman prepares a meal on a gas stove in an eatery. Energy prices remain a key cost…\n","protected":false},"author":2,"featured_media":407670,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,179305,179308,113,179309,179306,61,170995,60,179307,179304,1667,175586],"class_list":{"0":"post-407669","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economic-growth-thailand","10":"tag-economic-policy-thailand","11":"tag-economy","12":"tag-energy-crisis-thailand","13":"tag-finance-minister-thailand","14":"tag-ie","15":"tag-inflation-thailand","16":"tag-ireland","17":"tag-middle-east-war-impact","18":"tag-stagflation-thailand","19":"tag-thailand","20":"tag-thailand-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/407669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=407669"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/407669\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/407670"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=407669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=407669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=407669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}