Kiatnakin Phatra Financial Group (KKP) has upgraded its forecast for Thailand's GDP growth in 2026 from 2.1% to 2.5%, and for 2027 from 2.2% to 2.7%. The upward revision comes despite lingering geopolitical pressures, buoyed by robust tourism revenue alongside an acceleration in private investment and exports tied to the global artificial intelligence capital expenditure cycle (AI Capex Cycle).
The financial group noted that the revised figures reflect the growing strength of Thailand's electronics supply chain, particularly data storage and AI infrastructure components, which are experiencing a rapid surge in demand aligned with massive global investments in data centres.
KKP Phatra cautioned, though, that the national economy is entering a distinct K-shaped recovery.
While tech-driven sectors are expanding rapidly, grass-roots segments and traditional industries remain mired in stagnation, underscoring a widening divergence across different economic sectors.
Among traditional sectors facing heavy structural pressures are the automotive industry, which is struggling through the transition to electric vehicles (EVs), and the petrochemical industry, which is coping with regional oversupply.
Small and medium-sized enterprises (SMEs) and domestic appliance manufacturers are also under immense pressure from cheap imports, further undermining local competitiveness.
Although the International Monetary Fund (IMF) ranks Thailand as one of the world's four major AI-related exporters, KKP emphasised that a key challenge is ensuring that the economic benefits of AI investments remain within the country.
The group urged the government and private sector to tackle structural issues by upgrading the value chain beyond basic assembly work, capturing foreign investment profits by integrating local suppliers and managing resources effectively given the immense power and water consumption of AI infrastructure.
On monetary policy, KKP trimmed its 2026 inflation forecast to 1.8% and expects the Bank of Thailand's Monetary Policy Committee to hold policy interest rates steady through the end of 2027.
It noted that current inflationary pressures are temporary and cost-push in nature, while credit transmission remains constrained by ongoing household debt deleveraging.
Rate hikes during this phase would only strain vulnerable sectors on the downward slope of the K-shape without reining in high-income growth drivers.
