Bangkok: Thailand has a chance of being removed from the U.S. watch list as the Thai economy showed stability in June 2026, withstanding various global economic pressures. According to Thai News Agency, the Bank of Thailand reported that the economy maintained stability compared to the previous month, despite challenges posed by ongoing conflict and high oil prices affecting the tourism sector. Exports experienced a boost due to the global demand for electronics and data centers, offering a positive outlook for the country.
Ms. Chayawadee Chaiyanan, Assistant Governor for Corporate Relations and Spokesperson of the Bank of Thailand, noted that private consumption saw improvement, largely driven by government measures and the increasing sales of electric vehicles. The export sector and private investment continued to grow, supported by technology products and the global electronics market cycle, along with investments in data centers.
However, there was a decline in industrial production in several areas, particularly in petroleum due to maintenance shutdowns and non-electric vehicle production. The service sector experienced a slowdown, impacted by reduced foreign tourist arrivals and tourism revenue, which affected the hospitality industry.
The second quarter of the year revealed signs of economic deceleration compared to the first quarter, attributed to increased energy prices and travel restrictions resulting from the Middle East conflict. This situation weakened the tourism sector and private consumption, though government interventions partially bolstered consumer purchasing power. Despite these challenges, exports of technology products and data center investments helped mitigate the slowdown in the service sector.
Regarding economic stability, headline inflation decreased in June owing to lower global crude oil prices, while core inflation rose as businesses gradually transferred costs. The current account deficit showed improvement from the previous month, and the labor market remained stable.
Key factors to watch include developments in the US trade policy, recovery in tourism, impacts of high living costs on households and businesses, effects of government measures, and the potential impact of the El Ni±o phenomenon on the Thai economy.
Ms. Chayawadee also highlighted the U.S. Treasury's latest report on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners, which keeps Thailand on the Monitoring List. The assessment revealed that Thailand met only one of the three criteria required, maintaining a trade surplus with the U.S. However, the criteria necessitate countries to remain on the list for at least two consecutive assessments before potential removal.
Thailand no longer fulfills the current account surplus criterion, with the surplus ratio falling from 3.8% to 2.8% of GDP. Nonetheless, it sustains a trade surplus with the U.S., amounting to approximately US$72 billion, as it serves as a crucial production base for many export industries. The U.S. Treasury acknowledged the Bank of Thailand's measures to maintain stability and reduce baht volatility, clarifying that these actions are not intended to create a trade advantage.
Ms. Chayawadee mentioned that the U.S. is open to reassessing Thailand's status if, in the next assessment, the country meets only one criterion. The Bank of Thailand will continue to monitor the assessment results closely.