Thailand Viewpoint: Improving signs, but speedbumps ahead

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Thailand Viewpoint: Improving signs, but speedbumps ahead

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Thailand Viewpoint

Improving signs, but speedbumps ahead

Upgrading GDP on fiscal relief and strong momentum 26 May 2026

We raise our 2026E GDP forecast from 1.3% to 1.9% on a stronger 1Q26 outturn, an GEM Economics

emerging investment cycle, and the Bt400bn fiscal relief (~2% of GDP) which should Asia | Thailand

likely help Thailand avert a technical recession. But these are one-off or lagging drivers. Pipat Luengnaruemitchai

The oil shock, a second tourism setback, and a deteriorating current account are all still Emerging Asia Economist

ahead in the data — the upgrade reflects where Thailand has been, not where it is going. Kiatnakin+66 2 305Phatra9221 Securities

pipat.luen@kkpfg.com

Limited net growth impact from AI capex Kenneth Newell

Private fixed investment surged 10.1% in 1Q26, with data center and electronics capex EconomistKiatnakin Phatra Securities

providing a genuine lift. But import content on FDI-linked capex runs as high as 60-80%. kenneth.dona@kkpfg.com

Meanwhile, the economy is losing ground in automotive, petrochemicals, and traditional Burakorn Tipayasakulchai

electronics faster than it is building positions in new ones — headline numbers flatter EconomistKiatnakin Phatra Securities

the underlying picture. burakorn.tipa@kkpfg.com

The oil shock impact is still ahead

Higher oil prices and Middle East tensions will hit through channels that have yet to

appear in the data — weaker long-haul tourism, squeezed household budgets

concentrated among lower-income cohorts, and tail risk from supply disruption to crude,

LNG, and petrochemical feedstocks. Consumption stress should become increasingly

visible through 2Q and 3Q.

Recession averted—but the debt ceiling is being tested