Commerzbank economists Dr. Henry Hao and Moses Lim report that the USD/THB exchange rate climbed to 32.65, driven by Thailand's persistent trade deficit and rising global energy prices [1]. The Thai Baht (THB) has notably underperformed its regional peers, falling 3.5% against the US Dollar year-to-date, compared to an average decline of 1.3% for Asian currencies excluding Japan [1]. The currency's weakness is attributed to softer export performance and higher oil prices, which are negatively impacting the outlook for the Baht [1].
In February, Thai exports softened more than expected, declining by 9.9% year-on-year (Bloomberg consensus: 17.0%) versus a 24.4% drop in January, marking the weakest growth in three months [1]. Imports, on the other hand, surged 31.8% year-on-year (Bloomberg consensus: 25.0%) compared to 29.4% in January, representing the strongest growth since December 2021 [1]. This import growth was fueled by improved business sentiment following the stabilization of Thailand's political climate in late 2025 [1]. Capital goods imports jumped 49.3% versus 29.5% in January, while intermediate goods imports surged 53.3% compared to 20.3% previously, the strongest growth since August 2021 [1]. As a result, the trade balance remained in deficit at around -USD2.8 billion (Bloomberg consensus: +USD1.0 billion) versus -USD3.3 billion in January [1].
Looking ahead, the Trade Policy and Strategy Office (TPSO) highlighted two-sided risks to export growth, noting that the outlook depends on the impact of ongoing wars and whether US importers accelerate purchases before a 10% global tariff expires in July [1]. The Ministry of Commerce forecasts 2026 exports to be within a wide range of -3.1% to 1.1%, with a review scheduled for April [1].
CONCLUSION
The Thai Baht has come under significant pressure due to a combination of rising energy prices and a persistent trade deficit, resulting in notable underperformance against regional currencies. With exports weakening and imports surging, the trade balance remains in deficit, raising concerns about the Baht's outlook. Forward-looking statements from officials indicate continued uncertainty, with export growth subject to geopolitical and tariff-related risks.