The Bank of Thailand's Monetary Policy Committee warned on May 13 against broad consumption stimulus, saying it could restrict fiscal flexibility amid the economic fallout from the Middle East conflict [1, 2]. The committee emphasized that consumption-led stimulus would offer only temporary support. Instead, it called for prioritizing structural transformation and preserving fiscal space under ongoing global uncertainty [1, 2].
Thailand's economic growth forecast has been cut sharply to 1.5% for 2026, down from 2.4% in 2025, reflecting the conflict's impact [1, 2]. Despite this slowdown, Prime Minister Anutin Charnvirakul plans to borrow 400 billion baht (approximately S$16 billion) to fund cash handouts and help sectors affected by energy shocks caused by the conflict [1, 2]. Part of this borrowing will be directed toward accelerating Thailand's transition from fossil fuels to renewable energy sources [1, 2].
Opposition parties have challenged the emergency decree that supports the borrowing plan, arguing that the economy is still expanding and that the public debt-to-GDP ratio is close to a voluntary cap of 70% [1, 2]. Finance Minister Ekniti Nitithanprapas defended the plan, saying, "Thailand’s economy is currently facing a complex crisis with no clear end in sight," and vowed to proceed with the borrowing [1].
The stimulus package is expected to add about 0.6 percentage point to economic growth in 2026 but could reduce growth by 0.4 percentage point in 2027 due to a higher base effect [1, 2]. The Bank of Thailand expects that the stimulus impact on inflation will be limited because of weak domestic demand [1, 2].
The Monetary Policy Committee reiterated the need for a coordinated response to the crisis, involving monetary, fiscal, and targeted financial measures [1, 2]. In April 2026, the committee voted to keep interest rates at a near four-year low to support the economy amid uncertain conditions [1, 2].
The minutes released on May 13 of the April Monetary Policy Committee meeting serve as a guide for managing the economic challenges arising from the Middle East conflict while balancing short-term support with long-term fiscal health [1, 2].
