Thailand’s strong baht is creating pressure across the economy, from exporters facing weaker price competitiveness to visitors paying more for stays and meals.
Bangkok is facing a familiar but costly problem: Thailand’s strong baht. The currency has risen 8% against the US dollar this year and reached a four-year high, making it the second-strongest currency in Asia after the Taiwanese dollar.
Exports lose price advantage
Economists say the stronger currency is reducing the competitiveness of Thai companies abroad. When goods become more expensive in dollar terms, orders can slow and margins can come under pressure.
The impact is most visible in electronics and automotive manufacturing, two sectors where Thailand has long played a regional leadership role. Nava Chantanasurakon of the Federation of Thai Industries warned that firms are increasingly worried about rivals from Vietnam.
Vietnam faces higher US tariffs, but its weaker currency gives it a pricing advantage. That combination can make Thai products harder to sell in the same markets.
Tourism faces higher costs
Tourism is the other major pillar affected by the strong baht. A firmer currency makes hotels, meals and attractions more expensive for foreign visitors, even if local prices inside Thailand do not change.
For now, Theinprasit Chaiyapatranun, president of the Thai Hotels Association, says bookings have not fallen sharply. But if the trend continues and the exchange rate remains high into 2026, the tourism sector could see a clearer drop in arrivals.
The pressure is already visible in official figures. The Ministry of Tourism reports that the number of foreign visitors is down 7% year on year.
Government response and outlook
Thailand’s new government under Prime Minister Anutin says it will act. The prime minister has said coordination with the Bank of Thailand will be necessary to balance currency stability with support for exporters and tourism.
The departure of central bank governor Sethaput Suthiwartnarueput adds another layer of complexity, because the country must appoint a new head of the institution while also deciding how to respond to the currency’s rise.
The broader economic backdrop is mixed. Thailand had hoped 2025 would bring a recovery after the pandemic period, but gross domestic product is now forecast at only 1.8% to 2.3%, below most countries in the region.
There is still one positive sign: export value rose 14.4% in the first seven months of the year. Even so, new US tariffs and the strong baht are expected to slow that growth rate quickly.
For businesses and investors, the message is clear: Thailand’s strong baht is no longer just a currency story. It is now a test of competitiveness, policy coordination and economic resilience.
