Thailand’s NESDC Forecasts Economic Slowdown for the US and China

Thailand’s National Economic and Social Development Council (NESDC) has recently issued a report signaling a concerning trend for the globe’s largest economies—specifically, the United States and China. The forecast suggests that by 2026, both nations will be entering a phase of economic deceleration, driven by rising import costs, labour shortages, and a downturn in the electronics sector. This analysis provides a critical glimpse into the future of global economic growth and trade.

Global Economic Trends: A Softening GDP

According to the NESDC’s findings, after a challenging year of trade disputes in 2025, global GDP growth is expected to soften to 2.8% in 2026, a decline from 3.2% the previous year. This reduction hints at broader implications for economies reliant on robust global trade and cross-border activities. The NESDC’s report highlights that the global trade volume is also projected to contract to 2.3%, a stark reversal from the recorded expansion of 3.4% in 2025. Such forecasts raise questions about the sustainability of growth patterns observed in recent years.

The US Economy: Facing Tariffs and Labour Shortages

Turning our focus to the United States, the economic outlook is equally concerning. For 2026, the American economy is projected to grow by 1.7%, a decline from 1.9% in 2025. Analysts attribute this slowdown to a combination of factors, most notably the delayed effects of protectionist trade measures and stricter immigration policies.

As effective tariff rates increase, domestic producers are likely to pass on these higher import costs to consumers. This dynamic is expected to rekindle inflationary pressures, undermining the purchasing power of American households. With the Federal Reserve already in a delicate balancing act over interest rates, any resurgence in inflation could complicate its strategy, potentially leading to a halt in rate reductions.

Labour Market Challenges

Adding another layer of complexity, the US faces a tightening labour market exacerbated by stricter immigration controls. Sectors such as construction, logistics, and services could experience significant staff shortages, which may impact overall productivity and growth. Analysts warn that this could force the Federal Reserve to reconsider its current course of interest rate policy, stifling any hope for a robust recovery.

China’s Slowing Growth

Alongside the US, China is also grappling with its economic challenges. While specific growth figures for China in 2026 were not detailed in the NESDC report, the implications of an overall slowdown signal caution for global markets. Rising import costs and a downturn in key industries, particularly electronics, have the potential to hinder China’s growth trajectory.

The electronics sector, a critical driver of China’s economic engine, has particularly noted a downturn in demand. As trade tensions continue and global supply chains remain under stress, manufacturers are compelled to reassess their strategies. The decreasing demand for electronics not only affects production levels in China but can also lead to increased layoffs and a slowdown in consumer spending, further amplifying the challenges for the economy.

The Bigger Picture: Global Implications

The forecast by Thailand’s NESDC carries broader implications beyond the US and China. As the two largest economies slow down, the ramifications are likely to be felt across emerging markets and globally interconnected economies. Countries that rely on trade with the US and China could face increased economic instability, potentially resulting in a ripple effect that could pause growth trajectories worldwide.

This situation calls for vigilance among global policymakers and businesses alike. As inflation narrows the margin for economic maneuvering in the US and slows production in China, stakeholders must brace for what could be a prolonged period of economic adjustment and transformation.

In summary, the NESDC’s analysis highlights an intricate tapestry of interwoven economic factors influencing the world’s two largest economies. As the global landscape shifts, staying informed will be crucial for understanding the long-term impacts on both national and international scales.