According to CIMBT chief economist Amonthep Chawla, the economy is projected to grow by 0.7% year-on-year in the first quarter, down from 1.1% in the previous quarter, reports the Bangkok Post.
The weaker performance is attributed to sluggish domestic consumption and investment, mainly caused by delays in fiscal budget disbursement while awaiting the formation of a new government.
"Despite the slowdown, the Thai economy is unlikely to fall into recession as growth should pick up from the second quarter following the formation of a new government," he said.
CIMBT estimates Thai economic growth of 1.2% in the second quarter, partly supported by economic stimulus measures after a new government is formed by June. Thailand is scheduled to hold a general election on Feb 8.
Under this scenario, GDP growth is forecast to improve in the second half of the year, reaching 2.5% and 2.4% in the third and fourth quarters, respectively.
Tourism is expected to remain the key driver of economic growth this year, Mr Amonthep said, with foreign arrivals projected to reach 34 million this year, up from 33 million last year, largely supported by Malaysian travellers returning in greater numbers from the second quarter.
However, the volume of Chinese tourists is expected to remain weak this year, noted CIMBT.
The bank forecasts Thai GDP growth of 1.6% this year, pressured by an export contraction. This follows front-loaded exports in 2025, when shipment growth was projected at 12%, expanding GDP by 2.1%.
In addition, Mr Amonthep said the accommodative monetary policy of the Monetary Policy Committee (MPC) ended in December, when the central bank cut the policy rate by 25 basis points to 1.25%. In 2026, the MPC is expected to keep the policy rate unchanged throughout the year.
CIMBT expects the baht to trend weaker due to the central bank’s measures to supervise gold trading. Domestic political uncertainty and a potential downgrade of Thailand’s sovereign credit rating could also pressure the currency.
"The baht could weaken to around 32 per US dollar in the coming months. The baht recently appreciated past 31 per dollar due to market speculation related to gold prices," he said.