In 2026, this is a major turning point for the Thai economy, because we are beginning to face threats that many investors are still unaware of—namely “deflation,” which is different from the inflation we know.

I just studied this and found that deflation is not just about prices falling. It is a sign that people do not have purchasing power, do not dare to spend money, and if it goes unchecked for a long time, it can lead to an economic recession. What is important to understand is the difference between “slowdown in inflation” (prices are still rising, but more slowly) and “deflation” (prices are actually falling, going negative).

Judging from economic history, this is not some far-fetched fear. In the United States during the Great Depression (1929-1933), prices fell cumulatively by 27%. Banks collapsed, unemployment surged to 25%, and Japan also experienced its “Lost Decade” of more than 30 years—real estate and stock prices fell sharply, so people delayed spending.

Thailand now has conditions that pressure deflation: GDP is forecast to grow only 1.5% to 1.6%, the lowest in 30 years. Coupled with an aging society—where the number of elderly people is increasing rapidly—and household debt of more than 85% of GDP, this means people lack purchasing power.

This is exactly where investors need to stay alert. Deflation creates a vicious cycle that is difficult to fix. People believe prices will keep falling, so they delay buying. Sales decline. Businesses have to cut prices and lay off workers. Those who lose their jobs have no money, sales fall further and debt becomes an even more crushing burden, because the real value of the debt increases even if the amount borrowed remains the same.

So who benefits from deflation? I want everyone to understand clearly. Deflation has positive effects for which groups? The answer is people who hold cash and safe assets, because the purchasing power of money increases. They can buy good assets at lower prices.

For investment strategy, I recommend that during deflation, “Cash is King,” not “Cash is Trash.” Long-term government bonds tend to rise when interest rates fall. Gold is a safe asset that people flock to during crises. And if investing in stocks, choose defensive sectors such as essential goods, utilities, or healthcare—the kinds of things people still need no matter what the economy is like.

Actually, in 2026, this is an opportunity for those who prepare in advance. Understanding what deflation really is is no longer something distant. Rebalancing your portfolio and choosing the right assets will help you not just get through it, but also build wealth while others are panicking.