SCB EIC predicts 2–6 weeks disruption in Strait of Hormuz, raising Brent oil to $75–$107/bbl, causing slower Thai growth, rising inflation, supply risks, and cautious global monetary policies amid Middle East conflict.
Key Takeaways
- Growth slowdown: Thailand’s GDP growth may be 0.3–0.8 pp slower depending on severity of conflict.
- Inflation: Expected to rise to 1.5%, returning to the 1–3% target range sooner. In worst‑case escalation, inflation could exceed 4%.
- Policy response: The Monetary Policy Committee (MPC) may have room to ease interest rates further.
Impact on Energy Prices and Strait of Hormuz
SCB EIC forecasts that under the base case, the Strait of Hormuz will be closed for 2–6 weeks due to attacks on energy infrastructure. This disruption would raise the average Brent crude oil price to USD 75 per barrel. If the conflict escalates into a regional war, energy transportation could be severely disrupted, pushing Brent crude prices up to USD 107 per barrel.
Global and Thai Economic Effects
The global economy faces downside risks from these developments, with inflation rising about 0.4 percentage points and GDP growth slowing by 0.2–0.4 points. Rising inflationary pressures may delay monetary easing by major central banks. For Thailand, economic growth in 2026 could slow by 0.3–0.8 percentage points depending on oil prices, while inflation may return to target sooner or exceed 4% if tensions worsen.
Risks to Thai Business Sectors
Thai businesses face both direct and indirect risks from the Middle East conflict. While exports to the region are limited, certain industries like agriculture, food, and passenger vehicles rely on it. Rising energy costs, transportation disruptions, and raw material price increases affect supply chains, impacting tourism and healthcare. However, key agricultural products may see increased demand and benefit from rising global prices.
