Monthly economic update: June 2026
Executive summary
Global Economy
- Recent global economic data remained resilient, with the May PMI indicating steady growth. Global inflation pressures remain elevated, driven mainly by higher oil prices. Nonetheless, oil prices have recently eased as US–Iran negotiations progressed, and an initial MoU was reached, reducing tail risks. However, uncertainty remains high as nuclear talks are still far from a final agreement.
- US economy stays solid as labor market holds firm. Meanwhile, China’s economic data show softer domestic demand, while external demand remains robust.
- On monetary policy, Fed turns more hawkish as dot plot signals one rate hike; meanwhile other central banks remain cautious on inflation risks despite signs of easing.
Domestic Economy
- In April 2026, overall economic activity registered a slowdown compared to the previous month, as reflected by lower consumption and tourism, driven by lower spending on non-durable products as well as spending on hotel and restaurant. Meanwhile, merchandised export growth remained robust regarding US shipment due to AI-related demand alongside with a temporary boost from the short-term easing of US tariff measures.
- Thailand’s trade balance outlook is facing more fragile and could deteriorate as temporary export support fades while import intensity stays elevated. Despite strong export growth, but some support appears temporary and vulnerable to external risks. Persistently high energy costs are lifting oil-related imports, and China’s growing penetration in intermediate and capital goods is raising structural import dependence.
- The headline inflation (CPI) in May 2026 continued to rise but at the slower pace compared to previous month. This was driven by persistently stable fuel prices and passing-through energy and utility prices marginally. In addition, prices of dairy products, eggs and meats also declined slightly. On the other hand, the core inflation accelerated, reflecting broader cost pass-through into non-food and non-energy items.
Financial Market
- The US treasury yield curve flattened as the 2-year yield surged following a more hawkish-than-expected June FOMC. Meanwhile, Thai bond yields declined across the curve, with a bull flattening move as long-end yields fell faster than short-end yields following the decline in oil prices amid easing US-Iran tensions.
- Dollar overall strengthens on hawkish Fed repricing despite potential US-Iran peace progress. Meanwhile, The Thai baht weakened, in line with movements across major and regional currencies. In addition, Thai baht faces downside pressure from gold, given their historical correlation and gold’s weakness during Fed hiking cycles.
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