Bank of Thailand Governor Optimistic GDP Will Exceed Target at 2.1% Boosted by 400 Billion Baht Loan
The Bank of Thailand's Governor announced that this year's GDP growth is projected to exceed its target and reach 2.1%, supported by the government's 400 billion baht emergency borrowing decree. The additional funding is expected to add 0.6% economic stimulus compared to the original forecast. The central bank also revised its inflation estimate upward to 3.0-3.1% for this year, but reassured that Thailand has not entered stagflation as inflation is expected to decline gradually by the second quarter of 2027.
Bank of Thailand Governor Vithaya Rattanakorn stated that the central bank estimates the government's 400 billion baht emergency borrowing decree will add 0.6% stimulus to economic growth, bringing this year's overall GDP expansion to 2.1%, up from the previous 1.5% forecast based on a 300 billion baht borrowing plan.
Looking ahead to 2027, economic growth is projected at 1.6%, down from the earlier 2% forecast, due to the higher growth base this year. Regarding inflation, this year is expected to see 3.0-3.1% inflation, up from the previous 2.9% estimate, while next year's inflation is projected at 1.4%, compared to the earlier 1.5% forecast. As of April 2026, inflation stood at 2.89%, consistent with the Bank of Thailand's prediction that inflation will spike to 4-5% in some months before gradually declining in the second quarter of 2027.
Governor Rattanakorn stated that Thailand has not entered "stagflation" because, by definition, stagflation requires economic contraction combined with sustained high inflation. Currently, while inflation has risen moderately, it is expected to decline gradually in the second quarter of next year, meaning inflation will not persist long-term. Therefore, the country is not experiencing stagflation.
"However, circumstances change constantly, and there remains a stagflation risk that we must monitor and assess," the Bank of Thailand governor said. "That said, if we compare Thailand's inflation rate with other countries, Thailand's inflation remains on the lower end, while many countries are experiencing higher inflation rates."