Commerzbank’s Thailand update says May data show broadly stable economic conditions, with exports still supported by global electronics demand but facing risks from US trade policy and regional manufacturing weakness. The Bank of Thailand sees contained inflation pressures and little need to alter policy soon, while USD/THB is slightly lower even as the Baht remains down 5.2% year-to-date.

Exports steady as policy stance unchanged

"May exports moderated to 9.8% yoy vs 23.2% previously and were up 16.9% in the first five months of 2026. Imports eased to 34.5% yoy vs 44.0% previously, aided by the lower oil import bill due to the drop in oil prices. Imports are up nearly 36% year-to-date. The trade deficit narrowed to USD2.6bn from USD6.7bn previously, which also saw a smaller current account deficit of USD6.4bn from USD7.8bn previously."

"Looking ahead, Thailand's export sector should continue to benefit from resilient global electronics demand, although heightened uncertainty surrounding US trade policy, geopolitical developments, and weaker regional manufacturing activity could temper momentum in the second half of the year."

"The latest Bank of Thailand (BoT) assessment on the state of the economy expressed that the economy remained broadly stable in May, with modest improvements in domestic demand offsetting softer external trade."

"As such, there are few hints that BoT will alter policy anytime soon. The key risks highlighted were elevated living costs, geopolitical risks, US trade policy, and El Niño, which may push up food prices."

"Headline inflation remained elevated but stayed broadly stable at 2.8% yoy in May. Core inflation was just modestly higher at 0.9% yoy as firms gradually passed through higher input costs. BoT noted that inflation pressures remain contained, with few signs of broad-based price increases."

"Year-to-date, THB is down 5.2% vs USD."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)