China · Japan · Nation Thailand
Thailand faces deficit and baht risks despite S&P rating relief
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Thailand is entering the second half of 2026 with a mixed economic signal: S&P Global Ratings has maintained the country’s sovereign rating at BBB+ with a stable outlook, but economists warn that pressure from oil prices, rising imports, fiscal deficits and global uncertainty could keep the current account and the baht under strain.
Key facts
- S&P assessed that Thailand’s economy would grow by 2% in 2026
- The concern has sharpened even after the United States and Iran signed a ceasefire agreement last week
- It projected the current-account surplus at 2% of gross domestic product, while the government’s budget deficit is expected to remain high at 3.5% of GDP as fiscal policy continues to support the economy.
- In the base case, the situation eases, US inflation slows, peace talks proceed smoothly, the Strait of Hormuz remains open to shipping and crude oil stays below US$100 per barrel
- Gold could rebound to US$4,800-4,900 per ounce by year-end, while the baht could gradually strengthen to 31.50-32.00 per dollar.
- Gold would face pressure and could move around US$4,100-4,200 per ounce at year-end, or fall below US$4,000 if the Fed raises rates twice
Summary
The concern has sharpened even after the United States and Iran signed a ceasefire agreement last week. Markets remain focused on the 60-day negotiation period, during which both sides must seek a final settlement, as well as the possible commercial reopening of the Strait of Hormuz.
Thailand has already seen its trade deficit widen, partly because global oil prices rose during the conflict. Economists say the short-term pressure could push the country into a temporary current-account deficit, while some warn that the longer-term risk is more structural if Thailand continues to import high-value technology without moving up the production chain.