The global economy began the year facing challenges driven by a deceleration of growth catalysts and shifting global geopolitics. Most international institutions, such as the United Nations (UN) and the Organization for Economic Co-operation and Development (OECD), project global economic growth for 2026 to fall within the range of 2.7% to 3.3%. This represents a slowdown from the previous year, primary due to the impact of tighter tariffs and trade measures. Nevertheless, investments in AI and emerging technologies remain key tailwinds that help sustain the economy and enhance business efficiency amid volatility. Furthermore, fluctuations in the US Dollar—triggered by pressure on the Federal Reserve (Fed) to review its interest rate policy—have prompted some investors to reallocate capital into safe-haven assets like gold. Meanwhile, China's economic fundamentals remain weak; the country further cut its relending rate by 0.25%, effective January 19. The International Monetary Fund (IMF) forecasts global economic growth at 3.3% for 2026. Despite uncertainties stemming from geopolitical tensions and the risk that AI technologies might fall short of expectations, the IMF still views global economic growth this year as resilient. For 2026, the IMF projects that the United States economy will grow by 2.4%, China by 4.5%, and India by 6.4%, while the ASEAN-5 economies are expected to expand at a rate of 4.2%.
In January 2026, Thailand’s economy continued to face uncertainty from both domestic and external factors, alongside several key risks and challenges. The tourism sector is expected to play a more prominent role in driving the economy, supported by an increase in flights and new flight routes connecting to China and India.
However, monitoring the economic outlook in 2026 requires close attention to emerging risk factors carried over from 2025. These particularly include global trade policies and domestic structural adjustments, such as US tariff policies, the direction of monetary policy rates, the expansion of AI technology, public sector budget disbursements, and political transitions—the latter of which could disrupt the continuity of economic stimulus measures and the recovery of the tourism sector. Additionally, developments regarding the Monetary Policy Committee (MPC) must be closely monitored, as they have scheduled their first monetary policy meeting of 2026 for Wednesday, February 25, 2026.
Weather
In January 2026, upper Thailand generally experienced continued cool-to-cold weather, while the central and eastern regions remained cool. Mountain peaks and mountainous areas experienced cold-to-very-cold conditions, with frost developing on certain days. This was due to high-pressure systems from China continuing to extend and cover upper Thailand periodically. Meanwhile, in the southern region, overall rainfall decreased; however, heavy and concentrated rainfall persisted across the lower south.
Rubber Situation
In January 2026, global natural rubber prices experienced notable volatility. While prices were supported by crude oil movements and expectations of economic recovery in certain regions, uncertainty remained due to diverging supply and demand dynamics across key markets, including China, Japan, and the ASEAN region. Weather conditions—specifically heavy rainfall or drought—in major cultivation areas like the Southern region of Thailand threatened to disrupt tapping activities and crop yields, leading to supply fluctuations. Externally, volatile oil prices and rising production costs continued to put pressure on smallholders. The global rubber market is trending toward supply tightness due to declining yields and climate risks. However, overall demand for natural rubber remains robust, particularly from the automotive and tire industries in China and India, which is expected to support a price recovery over the medium to long term. In recent developments, the Rubber Authority of Thailand (RAOT), through a technical and research collaboration with the Royal Irrigation Department (RID), has taken the lead as a pilot agency in developing "Rubber Innovations for Thai Irrigation." This initiative transforms upstream raw materials into highly efficient water management equipment, leveraging natural rubber's superior properties of high elasticity, environmental durability, and long service life, while effectively reducing reliance on foreign material imports. The primary innovations successfully deployed include: "RID-UNITED rubber float system for trapping water hyacinth" and "Natural Rubber-Blended HDPE Pipes" for water distribution and drainage systems. This production initiative sets a clear target to absorb over 900 tons of rubber from the domestic supply system. For context, in December 2025, natural rubber export volumes stood at 447,000 tons, valued at 25.7 billion Baht.
Crude Oil Prices: WTI & Brent
Crude oil prices fluctuated following an announcement by US President Donald Trump stating that the United States would not utilize military force to take possession of Greenland, alongside a suspension of additional tariff measures against Europe. Regarding Venezuelan oil supply, the US extracted 50 million barrels of crude oil from Venezuela and liquidated a portion of it into the market. Concurrently, strict enforcement of sanctions remains in place following the seizure of an oil tanker. Meanwhile, the US Energy Information Administration (EIA) disclosed that US commercial crude oil inventories for the week ending January 23, 2026, increased by 3.6 million barrels, rising to a total level of 426 million barrels.
Disclaimer: The information contained herein is obtained from a variety of sources and the dissemination of information is to provide information to interested parties only. The Thai Rubber Association is not responsible for any damages that may occur from the use of this information by any person.
