Middle East Tensions Show No Signs of Easing, Posing Risks to Global and Thai Economies

Middle East tensions involving the U.S., Israel, and Iran have intensified, raising concerns over global energy supply disruptions and higher transport costs, particularly affecting energy-importing economies in Asia. In Thailand, headline inflation remained negative at –0.88% YoY in February for the 11th consecutive month, while core inflation rose slightly and business sentiment improved. However, higher oil prices driven by geopolitical tensions could increase inflation and reduce GDP growth, given Thailand’s reliance on Middle Eastern crude imports. The U.S. economy faces rising risks despite its status as a net oil exporter, with slowing payroll growth and unemployment rising to 4.4%. Meanwhile, China lowered its 2026 growth target to 4.5–5%.

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