UOB expects Thailand’s Thai Helps Thai Plus package to cushion growth in 2H2026 without prompting an upgrade to its 2026 GDP forecast. The programme is framed as targeted consumption support in a small open economy, where domestic demand remains uneven and real purchasing power is under pressure, while a Middle East energy shock could pass through to margins, household confidence and employment. UOB keeps its first-year fiscal multiplier assumption at 0.3–0.5, arguing the design is timely but temporary and is not public investment.
On UOB’s estimates, full disbursement of the THB175.7bn package could provide a 0.3–0.4 percentage-point GDP cushion, and the THB120bn 60/40 co-payment component could add 0.2–0.3 percentage points, all else equal. The bank sees the policy mix shifting from rate cuts towards targeted fiscal and credit relief, while supply-driven inflation keeps easing constrained. It maintains a 2026 GDP growth forecast of 1.5% and expects the Bank of Thailand to hold the policy rate at 1.00% through 2026–27.
Assessment of Stimulus Impact and Market Implications
Given the current date of May 28, 2026, we see the Thai government’s fiscal stimulus as a temporary support, not a game-changer for economic growth. The package is designed to prevent a slowdown in the second half of the year rather than to spark a major rally. This suggests that any significant market upside will likely be limited in the coming weeks.
We expect the Bank of Thailand to hold its policy rate steady at 1.00% for the rest of the year, which should keep interest rate volatility low. Thai 10-year government bond yields have been trading in a narrow range of 2.65% to 2.80% over the past month, and we anticipate this stability will continue. Therefore, strategies that benefit from low volatility in the rates market appear attractive.
Prospects for Equities and Currency Markets
For equity derivatives, the muted GDP growth forecast of 1.5% suggests the SET50 Index may struggle to break out to new highs. The latest consumer confidence figures from April 2026 were still weak at 63.5, indicating households remain cautious despite the stimulus. We believe selling call options with strike prices significantly above the current market level could be a prudent way to generate income from a range-bound or slowly appreciating market.
In the currency market, the stable and low interest rate policy will likely cap any major strength in the Thai Baht (THB). With Thailand’s current account showing a small deficit of USD 1.2 billion in the first quarter of 2026, there is little fundamental pressure for the baht to appreciate strongly. We see opportunities in options strategies that profit from the USD/THB pair remaining stable or drifting slightly higher.
