Since 28 Feb 2026, when the US joined Israel in launching the military operations "Epic Fury" and "Lion's Roar" against Iran, and now approaching one month on the morning of 27 Mar 2026, the Middle East conflict continues.
The price of refined oil in the Singapore market has surged over 100%, while retail diesel prices in Thailand have risen by 9 baht per liter. Gasohol prices have increased by more than 11.50 baht per liter, with expectations for further retail fuel price hikes domestically.
This has led to anticipated price increases for both consumer and capital goods, including transportation costs for public transit and freight. Some items, like pork, chicken, eggs, canal boat fares, and street food such as curry rice and noodles, have already seen price rises as vendors struggle with rising costs.
These developments further strain the financial status of the middle class and worsen conditions for low-income groups already facing hardship.
In fact, cash shortages and insufficient income have been issues since before the COVID-19 pandemic in 2020, with most Thai workers barely covering monthly expenses. Those earning 30,000 baht or less per month are especially affected, and the pandemic has deepened financial crises due to pay cuts or reduced salaries in some sectors.
According to the Bank of Thailand's data on average wages by industry, in Q4 2018, the average monthly wage per Thai worker was 14,048.41 baht. Six years later, in Q4 2024, the average wage rose slightly to 15,737.61 baht, reflecting only a 12% increase over this period.
Interestingly, comparing average wages between agricultural and non-agricultural sectors shows higher wage growth in agriculture, likely because agricultural wages started much lower than those in industry and services.
Average agricultural wages increased from 5,740.81 baht per month in Q4 2018 to 8,293.78 baht in Q4 2024, a rise of approximately 44.5% over six years.
Meanwhile, non-agricultural average wages increased from 14,942.41 baht in Q4 2018 to 16,093.75 baht in Q4 2024, a more modest growth of 7.7% over the same period.
Data on expenditures over the past six years, comparing average monthly spending in 2018 and 2024 from multiple sources, shows that average expenses have risen faster than incomes, increasing by about 14%.
This aligns with recent research from the Economic Intelligence Center (EIC) of Siam Commercial Bank (SCB), which studied Thai workers' real income (including overtime and bonuses) adjusted for inflation. It found a continuous decline in real income from 2020 to 2025. Although real income in 2025 recovered close to 2020 levels, it remains below pre-pandemic figures.
SCB EIC expresses concern that the Middle East war may push inflation, which was very low last year, up to 3.2%. If the conflict prolongs from two to four months, inflation could surge to 4-5% this year, exerting downward pressure on Thai workers' real income in 2026.
This means that despite working more, people become poorer as wages fail to keep up with rising living costs. Increased expenses stem from the oil price crisis, potential electricity rate hikes, higher transportation costs, and possibly rising prices of essential goods. Yet, not working is even less viable.
Although Thailand's current unemployment rate is not alarmingly high, SCB EIC is concerned about the overall decline in employment. The number of employed persons dropped continuously in 2025, partly due to retirements and aging workers leaving the labor market, alongside increases in unemployment and discouraged workers.
The workforce is shrinking, the number unwilling to work is rising, and those employed see slow, inadequate wage growth. Consequently, Thai society has relied increasingly on household debt, keeping debt levels high and household financial health deteriorating. If conditions worsen, some may default on debts.
Addressing the looming economic crisis this year is a significant challenge for the government. In the short term, relief measures to ease citizens' expenses remain essential during this crisis. However, efforts must also focus on upgrading Thailand's economic structure to a higher base to enable meaningful wage and income increases, sufficient to cover living costs and allow savings for emergencies, thereby revitalizing strong economic growth.
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