Monthly economic update: January 2026
Executive summary
Global Economy
- The 2026 outlook appears more resilient than expected, with the IMF upgrading global growth to 3.3% on easing US tariffs and strong AI investment, despite lingering geopolitical risks. In January 2026, while PMI data hinted at a late-year slowdown, activity stayed expansionary, US data surprised to the upside, and inflation showed signs of easing in some developed markets.
- For the US economy, strong US data underscore economic resilience, delaying Fed cut expectations. Meanwhile, China met its annual GDP target in 2025, but growth momentum continues to weaken. For monetary policy, most central banks are in the final stage of easing, though at differing speeds.
Domestic Economy
- In November 2025, overall economic activity expanded from the previous month, as reflected by increase in both domestic and external demand. Merchandise export and continued recovery in foreign tourist receipts contributed the growth. Private investment also improved primarily driven by investment in machinery and equipment. However, private consumption slightly declined in most categories including non-durable goods and durable goods consumption.
- In the Q3/2025, overall business loans of Thai commercial banks continued to contract close to previous period, due to the continued contraction in SMEs, while large corporate loans increased somewhat. Particularly, loan growth of most sectors remained contract. Meanwhile, large corporate NPL declined as some borrowers resumed repayments, while SMEs NPL continued to rise but at a slower pace.
- The headline inflation (CPI) in December remained contract but at a slower pace. The main factors were primarily attributed to the falling in energy prices as reflected by the global energy price, as well as the reduction of the fuel fund levy for diesel fuel, while prices of food and non-alcohol beverage edged up. The core inflation was relatively slowed, following the decline of non-food and beverage products. The overall headline figure for the full year of 2025 remained negative.
Financial Market
- US Treasury yields rose across the curve as strong data and hawkish Fed signals pushed back rate-cut expectations, with the 10-year yield climbing above 4.20% amid US-EU tensions over Greenland. Thai bond yields also steepened, as long-end yields rose on fiscal and election-related concerns, delayed BoT cut expectations.
- The dollar has been on a roller-coaster ride, strengthening in the first couple of weeks as upside economic surprises delayed and priced out some Fed rate-cut expectations. However, escalating US–EU tensions over the Greenland dispute later triggered a dollar sell-off. Meanwhile. the Thai baht outperformed on rising gold prices.
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