The global economy continues to confront risks arising from trade uncertainties, geopolitical tensions, and the trajectory of US interest rates, pointing toward a slowdown rather than a severe recession. Meanwhile, China is experiencing a slowdown in its property sector and weakening domestic demand; domestic automobile sales have decelerated, though exports of New Energy Vehicles (NEVs) remain robust. In response, China is utilizing monetary instruments and policy measures to sustain overall growth.
Recently, Fitch Ratings projected that global economic growth will slow to 2.4% in 2026, driven by China's growth decelerating to 4.4%, while the United States may see a modest recovery but remains constrained by tariff measures. Conversely, the International Monetary Fund (IMF) upwardly revised its global growth forecast for 2026 to 3.3%, noting that various countries have adapted better to US tariff policies, while continued investments in AI support market sentiment. However, following a subsequent escalation in hostilities between the US and Iran, conflicts in the Middle East could emerge as a "new risk" to the global economy. If the situation becomes prolonged and energy prices continue to rise, it could adversely affect inflation, economic growth, and the monetary policy directions of central banks worldwide.
In February 2026, Thailandโs economy continued to face uncertainty from both domestic and external factors. Thai Baht experienced volatility and depreciation, which directly impacted the cost of imported energy. Key risk factors include US tariff policies and broader economic anxieties stemming from the warโprimarily high inflation driven by surging energy and food prices due to supply chain disruptions. This environment poses a risk of stagflation, particularly in regions heavily dependent on imported energy and raw materials. Consequently, Thailand must fast-track measures to implement domestic structural adjustments, focusing on areas such as competitiveness, labor skills, and fiscal rebalancing.
Nonetheless, monitoring the economic outlook in 2026 requires close attention to ongoing risk factors carried over from 2025. This includes global trade policies, domestic structural adjustments, and a close monitoring of the Middle East conflictโspecifically the military strikes by the US and Israel against Iranโwhich could broadly impact the global economy through rising energy prices, transportation disruptions, and logistics bottlenecks. Most recently, at the Monetary Policy Committee (MPC) meeting held on Wednesday, February 25, 2026, the Committee voted 4 to 2 to cut the policy interest rate by 0.25% per annum, lowering it from 1.25% to 1.00% per annum, effective immediately. The 2 dissenting voices voted to maintain the policy interest rate at 1.25% per annum.
Weather
In January 2026, upper Thailand experienced slightly warmer temperatures during the early and middle parts of the month, accompanied by cold weather in certain locations and dense fog across multiple areas. The Northern and Northeastern regions continued to experience cool weather in the mornings. Meanwhile, the Southern region saw light, isolated rainfall on certain days.
Rubber Situation
In February 2026, global natural rubber prices stabilized with a slight upward trend. The rising rubber prices observed during the early part of 2026 (including the Lunar New Year period) were primarily driven by continuous growth in purchasing demand from China and India. This was further compounded by a reduction in market supply (supply shortage), resulting from supply tightness as rubber trees entered the leaf-shedding period and the tapping-closure season (wintering season). These factors sparked market anxieties over supply deficits, consequently driving prices upward in accordance with demand and supply dynamics. Additionally, escalating global crude oil prices led to a corresponding increase in the production costs of synthetic rubber. While natural rubber prices stand to benefit as an alternative commodity from surging global oil prices, the protracted conflict involving the United States, Israel, and Iran could pose a significant obstacle to international shipping, logistics, and freight transportation systems. This geopolitical volatility is expected to drive ocean freight rates higher. In January 2026, natural rubber export volumes stood at 373,000 tons, valued at 20.8 billion Baht.
Crude Oil Prices: WTI & Brent
West Texas Intermediate (WTI) and Brent crude oil prices adjusted upward as the market reacted to concerns over supply tightness. This bullish momentum followed unresolved nuclear weapons agreement negotiations between the United States and Iran. Notably, Iran stands as OPEC's fourth-largest oil producer, commanding a production capacity exceeding 3 million barrels per day. Market participants remain highly sensitive to a potential closure of the Strait of Hormuzโthe worldโs most critical maritime transit corridor for international oil tradeโwhich would trigger severe supply tightness, given that over 20% of global oil consumption relies on this waterway for transit. Meanwhile, the US Energy Information Administration (EIA) released weekly data for the period ending February 20, 2026, revealing that US commercial crude oil inventories increased by 16 million barrels.
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