# SCB EIC Analysis: Thailand’s Inflation Prospects in Light of Middle East Tensions

- Link: https://www.thailand-business-news.com/economics/293515-scb-eic-analysis-thailands-inflation-prospects-in-light-of-middle-east-tensions
- Published: 2026-03-12T10:36:38+07:00
- Author: Economic Intelligence Center Siam Commercial Bank

**The Middle East conflict has disrupted oil markets, risking inflation in energy-
dependent Thailand. Rising fuel, freight costs will hit businesses and households.
Policymakers must balance subsidies, enhance energy security, and promote efficiency
to mitigate impact.**

## Rising Energy Risks Impacting Thailand’s Economy

The Middle East conflict in early 2026 has unsettled global oil markets and disrupted
shipping routes, posing risks for energy-dependent Thailand. After experiencing 
prolonged low inflation, the country now faces a potential inflation rebound driven
by rising oil and freight costs. The Bank of Thailand keeps inflation below target
and policy rates low to support growth, but external shocks threaten this fragile
balance.

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## Thailand’s Vulnerability and Immediate Consequences

Thailand imports about 90% of its crude oil, making energy price hikes quickly affect
transport, manufacturing, food costs, and household budgets. The Producer Price 
Index will likely rise first, followed by consumer inflation in months. Businesses,
especially SMEs, will face shrinking margins, while lower-income households may 
bear the brunt of increased fuel and food expenses. The Oil Fuel Fund provides some
cushion but may falter if prices stay high.

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## Strategic Responses for Stability

Businesses should hedge risks, optimize efficiency, and negotiate supply terms to
manage costs, while households prepare for higher living expenses. Policymakers 
need to balance subsidies and incentives to ease immediate pressures without undermining
energy-saving goals. Diversifying energy sources and improving infrastructure will
strengthen long-term resilience, helping Thailand absorb future shocks more effectively.

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