BANGKOK, April 28, 2026 (BSS/AFP) - Thailand's economic growth and tourist arrivals are forecast to drop this year as the Middle East war roils global energy prices, the finance ministry said Tuesday.

The country's GDP growth is projected to dip to 1.6 percent, the ministry said in a statement, down from 2.4 percent in 2025.

Growth in the Southeast Asian nation is anaemic, with the tourism sector vital but arrivals yet to return to their pre-Covid highs.

The government said in February that this year's growth forecast was between 1.5 to 2.5 percent.

Thailand expects about 33.5 million foreign tourists this year, about two million fewer than previously estimated, the ministry said on Tuesday.

Tourists from Europe and the Middle East have declined as a result of the US-Israeli war against Iran, which began two months ago and has driven up fuel prices, the ministry added.

Visitors from the Middle East fell by a third in March compared to the same month last year, and European arrivals dropped around four percent, while tourists from other Asian nations rose six percent, according to Thai tourism ministry figures.

Thailand received nearly 33 million foreign visitors in total last year.

The country's core inflation was forecast to hit three precent this year, up from an earlier estimate of 0.3 percent.