Monthly economic update: February 2026
Executive summary
Global Economy
- Overall, countries' GDP growth in Q4/2025 showed signs of robustness, especially in Asia. Meanwhile, growth across DM economies was mixed. For recent data, economic data at the start of the year has remained resilient, with surprise indices pointing to upside momentum—particularly in the US. Meanwhile, tariff uncertainty is back in the spotlight, though the overall impact should be milder. For price pressures, inflation in EM Asia continues to surprise to the upside, while in major developed markets such as the US and the UK price gains have generally undershot forecasts.
- Recent US economic data signal a continued slowdown. For Fed-watch indicators, the data provide mixed signal. NFP beat expectation with 130K increase in January. Nonetheless, other labor metrics did not agree with it. For inflation, January’s inflation report was softer than expected, but not enough to justify an imminent Fed rate cut.
Domestic Economy
- In December 2025, overall economic activity expanded from the previous month in most categories, as reflected by increase in domestic demand thanks to the government supports. Particularly, private consumption indicators edged up in all major categories, private investment also rose consecutively. Moreover, the continued growing in merchandise export and recovery in foreign tourist receipts also helped support the momentum.
- In the Q4/2025, Thailand’s economic growth outperformed the market expectations. The expansion was primarily supported by a rebound in public investment due to the accelerated government disbursement during the first quarter of fiscal budget year 2026, strong merchandise exports and private consumption in all types of consuming products including a surge in vehicle purchases thanks to government stimulus. As a result, full-year GDP growth for 2025 reached 2.4%.
- The headline inflation (CPI) in January 2026 remained in the negative territory. Lower electricity and fuel costs, along with government subsidies, contributed to the negative headline figure. However, the prices of food and non-alcoholic drinks rose, particularly in prices of vegetables, beverages and ready meals. On the other hand, the core inflation was relatively stable, following the relatively unchanged in prices of other goods and services.
Financial Market
- US Treasury yields declined across the curve in a flattening move, driven partly by safe-haven demand amid concerns over AI-related job disruption in early February. They later partially retraced those losses as firm economic data. Meanwhile, Thai bond yields have largely returned to last month’s levels after retreating from an eight-month high at end-January, when the long end rose on election uncertainty and fiscal concerns. Yields later eased as political risk premiums faded and GDP came in stronger than expected.
- The dollar gains on strong US data especially NFP data. The Thai baht strengthened from end-last-month levels following the election as reduced political uncertainty spurred portfolio inflows. In additions, the Thai baht continues to show a strong correlation with gold prices.
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