Watcharaporn Kantaphayao, economist at Bualuang Securities (BLS), disclosed that Thailand’s economic growth is projected to slow to 1.8% in 2026, edging down from the estimated 2.4% in 2025. The subdued outlook reflects a challenging first half of the year, as the nation contends with the effects of new U.S. tariffs, political uncertainty, and constraints from the government’s fiscal position.
She forecasts that Thai exports will decline early in 2026 in line with softening global trade and the impact of tariffs. Meanwhile, government investment disbursements may decelerate by 30-40% during the transition to a new government, further stalling domestic economic activity. Persistently high household debt is expected to continue limiting private sector consumption.
A potential turnaround could unfold in the second half of 2026, supported by stimulus measures amounting to around THB 40 billion. Initiatives such as “Half-Half Plus Phase 2” and the “Easy e-Receipt” are expected to lift GDP by 0.1-0.2%. The economy is also likely to benefit from increased government investment post-election and a potential rebound in the global industrial cycle.
Fiscal pressures remain a concern. Public debt stands at 66.1% of GDP, nearing the 70% legal ceiling. The government’s budget deficit is around 4.5% of GDP, much higher than the pre-pandemic average of 2.5%, while fiscal revenue to GDP has fallen to 15%, well below the 25% seen in emerging markets. Such constraints limit the government’s ability to introduce large-scale stimulus in the future.
Thailand’s advancing demographic shift is also in focus, with projections showing the elderly will account for 31.6% of the population by 2035, posing further long-term fiscal challenges.
Piriyapon Kongvanich, Fundamental Investment Analyst at BLS, highlighted strong foreign capital inflows in February 2026, with foreign transactions making up 6.8% of total stock market value in the month—well above the long-term monthly average of about 2% and marking the highest level since the COVID-19 pandemic. This positive development is attributed to increasing political clarity, which has reduced the political risk premium previously plaguing Thai equities.
Additional support stems from foreign direct investment in digital and electronics sectors—such as data centers, semiconductors, and PCBs—spurred by a surge in BOI investment promotion applications from late 2024 to mid-2025. This deployment of capital is expected to enter the real economy within a year of approval, boosting demand for power and digital infrastructure and benefiting listed utility and telecom companies, including GULF, ADVANC, and TRUE.
Exports remain under pressure broadly, yet high-value electronics tied to AI technology made up 19.2% of total export value in 2025, up from the 13.5% pre-pandemic average, indicating a positive structural transition. Should the industrial sector recover globally in the latter half of 2026, petrochemical and industrial stocks such as PTTGC, SCC, and pet food producer ITC could see benefits.
The tourism sector is another bright spot, with Thailand expected to welcome 34 million foreign visitors in 2026, up 3.1% from the previous year. Despite Chinese arrivals remaining below pre-pandemic levels, growth from India and Russia should underpin travel and hospitality stocks, including AOT, CENTEL, and BDMS.
Market earnings per share (EPS) in 2026 are projected to reach THB 90—a 9.8% increase year-on-year. With a 10-year average PER of 16.7x, the SET Index year-end target is set at 1,500 points, with a possible range of 1,350 (bear scenario) to 1,570 (bull scenario).
Top picks for stable profits and domestic consumption include CPALL and CPN, while high-dividend bank stocks SCB and KTB also remain attractive.
Piriyapon concluded that 2026 will be a year to focus on quality stock selection rather than broad speculation as political and economic volatility may be pronounced in the first half, but the latter half could bring renewed opportunities, powered by digital investment and global industrial recovery.
Meta disc: Bualuang highlights stocks to benefit from Thailand’s economic recovery in 2026 amid stimulus measures and foreign fund inflows.
