Thailand’s yield curve may flatten as easing inflation and a slowing economy draw investor demand for longer-dated bonds, according to analysts. The spread between the country’s benchmark 2-year and 10-year bonds is expected to drop to 74 basis points by the end of the year, according to the median estimate of economists surveyed by Bloomberg, compared with 98 basis points on Wednesday. They expect the decline to be driven by long-maturity notes.

The narrowing gap reflects shifting market expectations as inflation cools and growth slows, making longer-term debt more attractive. Analysts note that the trend could persist if monetary policy remains accommodative and external pressures ease. The shift underscores evolving dynamics in Thailand’s fixed-income market amid broader regional trends.