The Strong Baht Paradox: Why Thailand's Economy is Struggling in 2026
Explore the paradox of Thailand's economy in 2026, where a strong Baht (up 9% in 2025) is hurting export competitiveness despite low GDP growth and regional depreciation.
Is a strong currency always a sign of a healthy economy? For Thailand in 2026, the answer's a resounding no. Thailand enters the year on a puzzling note: while its economy faces stiff headwinds and sluggish growth, the Baht has strengthened substantially against the dollar. It's a disconnect that has policymakers on high alert.
Thailand Baht Strength 2026 Impact on Exports
Last month, the country's Minister of Finance cautioned that the Baht was too strong. For an export-dependent nation, an overvalued currency makes its goods and services—including its vital tourism sector—more expensive for foreign buyers. As the same amount of dollars now buys fewer Thai products, Vietnam is increasingly biting into Thailand's market share.
Defying Regional Trends: Why the Baht is Rising
The Baht's performance is an outlier in Southeast Asia. While the Indonesian Rupiah and Vietnamese Dong lost value against the dollar in 2025, the Baht gained nearly 9%. This appreciation isn't driven by fundamental economic strength but by massive capital inflows.
- Direct equity investment in the non-bank sector grew by 10% in 2024.
- In the first nine months of 2025, it rose another 9%.
- A surge in gold prices and trading volume has further propped up the currency.
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